Two cars also rammed into each other, while weapons were brandished during the incident which left nearby residents worried.
A spokesman for West Midlands Police said: "We've arrested a teenager on suspicion of wounding after another boy was found with stab injuries in Fishley Lane, Bloxwich, at around 6pm yesterday (10 February).
"We were called to reports of disorder where weapons were brandished and two cars were ramming into each other.
"We discovered a 16-year-old boy who was hurt and he was taken to hospital with injuries which are not believed to be life threatening.
"A 17-year-old boy was detained from a vehicle in Bell Lane, Bloxwich, a short time later and a knife was recovered.
"He was also arrested on suspicion of possession of an offensive weapon and theft of a motor vehicle and remains in custody for questioning."
Two ambulances, two paramedic officers and the West Midlands Care Team were all sent to the scene to treat the youngster.
Ambulance staff provided specialist trauma care at the scene before transferring the teenager to hospital, chiefs confirmed.
A spokesman for West Midlands Ambulance Service: "We were called to reports of a stabbing on Fishley Lane at 6.01pm.
"Two ambulances, two paramedic officers and the West Midlands Care Team were sent to the scene. On arrival we discovered a teenage male who had suffered serious injuries in the incident.
"Ambulance staff provided specialist trauma care at the scene before transferring the patient to hospital. On arrival at the hospital, the patient’s condition was described as serious."
Fishley Lane remained sealed off down to the junction with Stoney Lane and Buxton Road on Friday morning.
Anyone with information is asked to contact West Midlands Police and quote log 3485 of 10/02/22.