Police hunting for three men following bashing death in Melbourne home

A man has been killed and another assaulted in what appears to be a targeted attack at a home in Melbourne's west.

Homicide detectives discovered a body at a house in Caroline Springs after being called to reports of a dispute just after 3am.

Police say three men entered the home and assaulted two men inside.

Neighbours said they were woken when the altercation later spilled out onto the street.

"I thought it was drunk people arguing ... now that I know what's happened here it's a bit shocking," neighbour Rex Cruz said.

Witnesses reportedly saw a man being bashed with a bat or a pole before he was chased back into the house.

Believed to be aged in his late 20s, his body was later found in the lounge room of the Rosella Crescent house.

A second man who was also assaulted is believed to have left the scene in a silver car.

The three attackers fled in a dark-coloured Ford sedan and travelled east with their headlights off.

Forensic investigators are examining a small blood stained knife found outside, which police believe may have been used in self-defence by one of the two victims.

Police are yet to identify either victim and are continuing their hunt for the killers.

If you have any information that could assist police, contact Crime Stoppers on 1800 333 000.