US, Texas - One person has been killed and two others wounded in a shooting during a packed Texas Gulf Coast beach party.

Word of mouth of the unauthorized party spread on social media Saturday, drawing thousands to Surfside Beach, about 40 miles south of Galveston, before it turned deadly.

Among the victims, 25-year-old Derrick Milam was hit in the neck by a stray bullet and pronounced dead on the beach.

According to his step-sister Danielle Banks who was also in attendance, the party had become chaotic with numerous fights breaking out prior to the shooting that took over the entire beach.

Speaking with the Houston Chronicle, Ms Banks, 23, said news of someone shot rippled through the crowds until reaching her. She never thought once the lone fatal victim could have been her step brother, a young father soon to be married.

'Dead, dead, dead,' she reported hearing passersbys say as she moved in the direction people were fleeing from.

'I saw his face,' she told the Chronicle upon reaching Mr Milam, 'covered in blood and he was laying in a puddle of blood.

'It was really chaotic,' she said. 'It's still sinking in with me.'

She said his mother and sisters who all live in Houston, are still reacting to his death which has traumatized them.

'He was loving, fun, outgoing, charismatic and he was a good father,' Ms Banks told the Houston Chronicle.

Among the other two shooting victims, a male teenager was reportedly shot in the buttocks and another man was shot in the leg, according to KTRK.

They were airlifted from the beach and to a local hospital.

Initial reports had three injured in addition to the fatality but Surfside Police Chief Gary Phillips told Brazoria County's The Facts newspaper that only two others sustained gunshot wounds.

Surfside Beach authorities didn't return calls seeking information Sunday. It wasn't clear if arrests were made.