The gun battle, which lasted for several minutes, took place in a forest close to the border with Chhattisgarh.
A police team led by District Superintendent of Police Akhileswar Singh, which included personnel from the district voluntary force, raided the site and retaliated when the extremists fired at them.
"Fourteen Maoists were killed. Arms were also seized," Inspector General of Police Soumendra Priyadarshi told IANS.
Malkangiri, over 600 km from state capital Bhubaneswar, is considered a stronghold of Maoists.