Clashes involving anti-aircraft and machine gun fire erupted near the flashpoint town of Lasanod, at the southern end of the disputed border, near Ethiopia.
"Puntland militiamen attacked our military barracks in Ganbara village near Lasanod this afternoon," Somaliland military commander Keyse Ahmed told AFP.
"We defeated them and captured several of their fighters," he said. "Several of their dead bodies are still strewn across the area as we speak and we retain full control of the village they attacked."
Reports from local witnesses indicate that at least nine combatants were killed in the fighting, which lasted several hours.
"It was very heavy fighting, and the elders in the area counted nine killed. They are from both sides and all of them are fighters," said Abdihakim Mohamed, a local elder.
Yusuf Mustafe, another elder from the town of Lasanod, gave the same death toll but could not confirm which side had the upper hand.
Puntland officials could not immediately be reached for comment.
Puntland declared itself autonomous in 1998 but long retained close ties to the central administration in Mogadishu, while Somaliland, which broke away soon after Somalia began its descent into chaos in 1991, is more peaceful than the rest of the country and is seeking international recognition.