The two victims were identified as Jose Gilbert Vega, a 35-year veteran of the department, and Lesley Zerebny, who is the mother of a 4-month-old.
A third officer was wounded and is being treated at a local hospital, Police Chief Bryan Reyes said.
The suspect has not been captured, Reyes said, but police have surrounded a house and "they're going to treat the house as if he's still in it."
Officers went to a residence about 12:15 p.m. (3:15 p.m. ET) after a woman called to say her adult son was causing a disturbance, Reyes said. The suspect refused to open the front door and threatened to shoot the officers, Reyes said.
"The officers, from what I understand, were at the front (door) trying to negotiate with the suspect to just comply," Reyes said. "It was a simple family disturbance and he elected to open fire on ... guardians of this city."
A veteran and a young mother
Vega, a 63-year-old father of eight, had submitted paperwork to retire in December and was working an overtime shift on Saturday, Reyes said.
"Here he is, 35 years in, still pushing a patrol car for our community to make it better," said a visibly emotional Reyes. "On a day he wasn't even designed to work"
Zerebny, 27, had recently returned to duty from maternity leave, Reyes said.
She had worked about a year and a half with the department and was married to a deputy with the Riverside County Sheriff's Office.
The wounded officer's name and condition was not released but Reyes said the officer was alert and providing information to investigators.
No motive was provided for the shooting.
Officers from Palm Springs and nearby law enforcement agencies converged on the neighborhood and surrounded a house where the shooter may have holed up, Reyes said.
A four-block perimeter has been set up and people in the neighborhood have been told to stay inside.
The Riverside County Sheriff's Office has taken over the investigation. Deputy Armando Munoz, a spokesman for the agency, said investigators are trying to contact the suspect but they're not certain he's inside the building.
At a news conference, Reyes asked the public not to use social media to live-stream movements of officers who surrounded the house.
"Understand we are looking for a cop murderer," he said. "Do not do that for (the officers') own safety."
More than eight hours after police first arrived, CNN affiliate KMIR reported that a robot on wheels rolled past a group of reporters toward the scene.
'My employees are broken'
This is the latest shooting of multiple police officers in the United States.
On July 17, three officers were killed and three wounded by a gunman in Baton Rouge, Louisiana
. About a week earlier, a gunman killed five officers and wounded seven in Dallas.
Reyes said officers are grieving the two slain officers.
"My employees are broken," he said. "The time to pray for the Palm Springs PD is now."
The public responded by leaving flowers in front of the police station. The city of 45,000 residents is 100 miles east of Los Angeles.
"Today Palm Springs lost two brave officers," Reyes said. "They go out every day and put their boots on the ground for everybody in this community. They gave it all for you."
Later Saturday night. Palm Springs police officers started a procession for both officers that led from the Desert Regional Medical Center to the Riverside County Sheriff Coroner's Office in Indio, California.
Onlookers gathered at the Interstate 10 overpass as squad cars with flashing lights passed underneath them.
California Gov. Jerry Brown, offering his condolences to the officers' families, ordered the flags at the state capitol to be flown at half-staff.
"Officers Vega and Zerebny were killed today doing what they do every day -- protecting their community," he said in a statement. "We grieve with the family members, friends and fellow officers coping with this senseless tragedy."