The victim was found injured in Lichfield Street and died at the scene, after police were called to reports of disorder which is believed to have started at around 11.30pm yesterday.
Two other men were injured and taken to hospital. They are not in a serious condition.
A police forensic tent was in place outside the Horse and Jockey , and a second tent was in place outside Walsall Street Car Park, which was also cordoned off.
A 46-year-old man found near to the location has been arrested on suspicion of murder. It becomes the sixth murder investigation to be launched in recent days.
Detective Inspector Justin Spanner from the force’s homicide team said: “A murder investigation has been launched and I am appealing for anyone who may have been in the High Street, Bilston between 11.30pm and midnight who may have seen what happened leading up to the attack to call police on 101 or call Crimestoppers anonymously on 0800 555 111."
Officers were carrying out forensic tests at the scene today.
Pat McFadden, the MP for Wolverhampton South East, visited the scene today and spoke with police after being informed of the news.
He told the Express & Star: "This is a truly horrific murder. It has shocked the people of Bilston.
"I would encourage anyone who saw or heard anything to inform the police to help them with their investigation."
Numerous businesses on Bilston's High Street were forced to stay closed while the police cordon remained in place.
Dean Clarke, who helps out at W&G Grocery just down the road from the stabbing, described the incident as 'sad', adding: "It concerns me, things are getting bad."
Seventy-three-year-old Alan Robinson, from Bilston, added: "You get used to it with the police cut backs. There has been a few bad incidents like this over the years."
The recent spate of knife murders, together with a number of shootings, prompted Chief Constable Dave Thompson to speak about his concerns over the number of young men becoming involved in knife crime.