Mullah Abdul Fayaz was shot while driving in the center of Kandahar city, said deputy police chief Gen Salim Khan.
He said it was not clear who was responsible for the killing. One of the cleric's aides, Haji Qari, said Fayaz died while being taken to a hospital in the city.
Fayaz was a supporter of President Hamid Karzai.
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In other developments, gunmen fired at a vehicle in eastern Afghanistan, killing 11 civilians Friday in what was believed to be a personal dispute, officials said Sunday.
The shooting occurred in Kunar province, said Dad Mohammed Rasa, an official at the Ministry of Interior in the capital, Kabul. He said police were investigating the killing and no one had been arrested.
A senior official in the province, speaking on condition of anonymity, said investigators believed the murders were sparked by a personal feud.
Fighting stemming from personal disputes is relatively common in Afghanistan.
Meanwhile, Afghan forces and US-led coalition troops captured a regional Taliban commander, Mullah Abdul Bari, in a raid on a house in Uruzgan province last week, Defense Ministry spokesman Gen. Mohammed Zaher Azimi.
The head of the Afghan National Army in the region, Gen. Muslim Amed, said Bari was caught with two other members of the former hardline regime.
"We have been chasing Mullah Abdul Bari for a long time. We got intelligence that he was hiding in a home and ANA and coalition forces raided the home and caught him," he said.
There have been a spate of attacks by Taliban-led rebels in Uruzgan and neighboring provinces since the end of a winter lull in fighting.