Officers responded to Market and the west side of Steuart Street after a call about a suspicious package at 11:23 a.m., Officer Albie Esparza said.
Steuart Street between Mission and Market streets was shut down after officers found a package, Esparza said.
A bomb squad had been called to the scene as of 1 p.m.
Those nearby have been notified to stay indoors, while some evacuations took place at ground-level restaurants, Esparza said.
Police are urging people to avoid the area, which has been shut down to pedestrians and traffic.
San Francisco Municipal Railway service in the area has been disrupted because of the police activity, Muni spokesman Paul Rose said.
The inbound F-Market/Wharves streetcar line is switching back at Market and 11th streets, while the 6-Parnassus, 14-Mission, 21-Hayes, and 31-Balboa bus lines are being rerouted, Rose said.