Fr Cosmas Omboto Ondari was standing outside his church in the South West region on Wednesday when he came under fire.
In a statement released on Facebook, local Catholic leaders described the shooting as a "heinous crime". They said government forces were to blame.
The Diocese of Mamfe said: "While we mourn with the Mill Hill family and the national family of Fr Ondari, we trust that he died doing what he has offered his life for.
"He was serving humanity far away from home and family, but he was one with the people of Kembong who loved him so well and whom he loved so much."
Media reports suggest Fr Ondari - who belonged to the Mill Hill Missionaries - may have been caught in cross-fire between soldiers and armed separatists.
The 33-year-old Kenyan national had been serving as an assistant parish priest at St Martin of Tours in the village of Kembong.
Fighting between English-speaking separatists and government forces in Cameroon's South West and North West regions has intensified since 2016. Hundreds of civilians have died.
Having long-claimed discrimination under a national political system dominated by French-speakers, separatists want Anglophone areas to become an independent nation - Ambazonia.
Hundreds of thousands of people have been displaced by the violence.
Stay up to date with the latest news stories from a Christian perspective. Sign up to our daily newsletter and receive more stories like this straight to your inbox every morning.