Birgitta Almeby, 72, was returning from work when she was attacked by unknown assailants in the upmarket locality where she lives.
"She was returning from her office and was attacked when she arrived in front of her home in the Model Town neighbourhood," Awais Malik, a senior police official told AFP.
Doctors said Almeby was hit in the chest and was recovering in hospital.
"A bullet hit her in the chest. We have treated her and she is improving now," Ali Usman, a doctor at the hospital, told AFP.
No further details about the attack were immediately available.
Police and colleagues told AFP Almeby is the managing director in Pakistan of Full Gospel Assemblies, which describes itself as a 'church fellowship' founded in the United States with congregations worldwide.
The organization runs charities in the country including a technical training institute, adult literacy centre and orphanage.
She has lived in Pakistan for the past 38 years, according to police.
Considered Pakistan's cultural capital and close to the Indian border, Lahore is a city of eight million that in 2010 suffered a string of high-profile bombings blamed on Taliban and Al-Qaeda-linked militants.
In August last year, a 71-year-old US development worker Warren Weinstein, was kidnapped after gunmen tricked their way into his Lahore home. Pakistani officials believe he is being held by al-Qaeda and Taliban extremists in Pakistan's lawless northwest.
In April, a British Muslim Red Cross worker was beheaded nearly four months after being kidnapped in the southwestern city of Quetta.