Director General Inter-Services Public Relations Asim Bajwa confirmed "all four suicide bombers were killed" and a clearance operation is underway, DawnNews online reported.
Firing reportedly began around 6 a.m., when the terrorists attacked the colony, the sources told DawnNews.
The gunmen were wearing suicide jackets.
Two of the attackers detonated their suicide jackets, and two others were killed by security forces, the sources added.
The colony lies near the Pakistan-Afghanistan border.
Peshawar has suffered numerous terrorist attacks but it was not immediately clear who was behind Friday's assault.
The city suffered its worst terror attack in December 2014 when Taliban gunmen massacred more than 150 people, most of them children, at an army-run school.
The last deadly attack in the city came in March this year when a bomb ripped through a bus carrying government employees, killing 15, DawnNews added.
