The three hostages’ nationality is not known. The man was shot dead trying to resist the gang, reports said.
It is believed to be the first time foreigners have been abducted in Timbuktu, once popular with tourists.
The gunmen burst in as the four were dining in a restaurant on the central square of the ancient city of Timbuktu.
They ordered the Europeans there to follow them, a customer at Amanar restaurant told the Associated Press.
One of them, an elderly man, refused to get inside the car and was killed on the spot, the witness said.
Reuters news agency quoted an unnamed government source as saying the dead man was German.
The incidents are the latest in a series of abductions of foreigners believed to be the work of Al-Qaeda in the Islamic Maghreb (Aqim).
French soldiers have joined Mali’s army in the hunt for the French pair kidnapped in Hombori, according to AFP.
They were the first Westerners in Mali to be kidnapped south of the River Niger.
The captives were named as Philippe Verdon and Serge Lazarevic, in documents seen by AFP.
They had been sent by the company Mande Construction Immobiliere to take soil samples in the Hombori region where it planned to build a cement factory.
A security guard at their hotel said that “the kidnappers were armed to the teeth”.
“I was tied up and told to point out the rooms of the Frenchmen, whom they brutally took away,” the security guard said.
Al-Qaeda-linked fighters have in the past brought hostages into northern Mali from neighbouring countries, such as Niger where four French nationals – still being held – were kidnapped in September 2010.
Huge swathes of the Sahel region south of the Sahara Desert have been rendered off-limits to foreigners.
Timbuktu is one of the many former tourist destinations in Mali that have been deemed too dangerous to visit by foreign embassies due to the risk of kidnapping by the local chapter of al-Qaeda.
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