"Curfew has been lifted from all parts of Sopore following improvement in the law and order situation," a police spokesman said.
He said life has returned to normal in the town and people were going on with their daily chores.
The restrictions were lifted from most parts yesterday morning, but continued in some sensitive areas as a precautionary measure to maintain law and order, the spokesman said.
A youth, Arshad Ahmad Shah, was killed on Monday and four others were injured when security forces allegedly opened fire to disperse a group of stone-pelting protesters in Krankishivan locality of the town.
The forces were leaving Tarzoo area of Sopore after concluding an anti-militancy operation in which a top Pakistani "commander" of Lashker-e-Toiba outfit was killed.
The government has constituted an enquiry committee comprising District Magistrate Baramulla to ascertain the causes and circumstances of the firing incident.
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