Police were called to Lyons Road near Williams Road in Five Dock about 3:45pm today following reports of a stabbing.
Witnesses said the 82-year-old was stabbed on the street by another man, who ran from the scene.
They rushed to help the older man before paramedics arrived and rushed him to the Royal Prince Alfred Hospital in a critical condition.
Police, who set up a crime scene in Five Dock, arrested a 51-year-old man in Pyrmont about 6:20pm.
He was tonight assisting police with their inquiries at Day Street police station.
Police said it was believed the men knew each other.
