Residents of three villages in Borno State have repelled an attack by suspected Boko Haram fighters, an eyewitness told the BBC.
Report said at least 200 militants were killed during the fighting in the Kala-Balge district of the state, he said.
The witness said the residents had formed a vigilante group.
The area which came under attack is not far from the site of a market massacre last week in which more than 300 people were killed.
The suspected Boko Haram militants overran the town of Gamboru Ngala 10 days ago on its busy market day in a killing and looting raid which lasted about five hours.
A security official told the Associated Press news agency that the vigilantes in Kala-Balge, which is near Lake Chad, were ready for a fight after learning of an impending Boko Haram attack on Tuesday.
The eyewitness, who spoke to the BBC Hausa Service on condition of anonymity because of security concerns, said the area was littered with bodies after the fighting.
He had seen 50 bodies in one village and 150 in another village, all of which he thought were the corpses of militants.
Residents also seized three cars and a military vehicle from the attackers, he said.