Police seized a loaded double-barrelled shotgun during a foot pursuit in Nelson Bay last night.
Port Stephens police were called to Tallean Road about midnight after reports of a suspicious male driving a black Holden Barina.
Police located the car and confirmed it had been stolen from Rigney Street, Shoal Bay last night.
A man was chased into bushland after walking towards the stolen car, police said.
Police searched the area with the help of the NSW Police Dog Unit but could not locate the man.
A police dog found a mobile phone and a loaded double-barrelled shotgun.
The man is described as being of Caucasian appearance, aged in his mid 20s, very short hair or shaven head, about 175cm tall with a skinny build. He was wearing a white hooded jacket and black pants.
A crime scene was established and a number of items will be forensically examined.
Anyone with information is urged to contact Crime Stoppers on 1800 333 000.