Parks Canada officials are out with tracking dogs to collect droppings and try to find the cougar.
The north side of the townsite is closed along both sides of the Canadian Pacific rail line between Norquay Road and the Compound Road.
"They say they have confirmed that a man was knocked down by a cougar in that area Thursday but he swung his skateboard at the animal, causing it to back off," said Bill Hunt, a resource conservation specialist with Banff National Park.
Officials say the animal's behaviour is a major concern.
This is the second reported sighting of a cougar in the area.
Local residents told park officials that they saw a cougar attack a deer in the town park several days ago.
Park staff say they might need to euthanize the animal if they find it but will try to determine why it attacked before doing so.
Until then, they are asking people to stay out of the area and be cautious.
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