"They shot at his car, but the car was armoured. He is fine, there are no injuries," a source, who declined to be named, told Reuters.
Government officials in Rome said that Consul Guido De Sanctis wasn't hurt because he was travelling in an armored car.
They insisted on not being identified because they weren't authorized to make the information public. The ANSA news agency said it spoke to De Sanctis who confirmed he was fine.
The car in which the consul was travelling was shot at when it stopped at a crossroads. He was reportedly returning home after work and the car was hit by several bullets, which were reportedly fired from another car and aimed directly at where the consul and his driver were sitting.
The incident comes four months after U.S. Ambassador Chris Stevens and three other Americans were killed in the city in an attack on the US mission there.
Italy is Libya's former colonial ruler and enjoyed close ties with slain dictator Muammar Qaddafi, though it then joined NATO-led efforts to unseat him.
Italy is also the biggest foreign investor in Libya's energy industry and has been trying to build up relations with the new government in recent months.
De Sanctis, 51, has been in Benghazi since the start of the uprising against Qaddafi in February 2011.
He is due to leave for a new posting in Qatar next week.