The 27-year-old man was arrested on suspicion of murder and seven counts of attempted murder after being detained in a Birmingham suburb this morning.
The suspect was found at an address in Nately Grove, Selly Oak, at around 4am and is now being questioned by officers, West Midlands Police said.
The force declared a major incident after eight victims were stabbed during a rampage spanning some 90 minutes in the city centre in the early hours of Sunday.
The knifeman struck at several locations across the city in what detectives believe were random attacks.
Large parts of the city centre were closed off throughout Sunday as a result as forensic officers scoured the streets and looked down drains for knives.
Police launched a massive manhunt for a sole male attacker on Sunday and released CCTV footage of a man they said was wanted on suspicion of murder.
But the force is also facing criticism of their response to the attacks, including why the attacker was allowed to wander the city for as long as he did.
Officers said they received the first call to Constitution Hill, north of the city centre, just after 12.30am, where a man had received a superficial injury.
This was followed by a further call 20 minutes later to nearby Livery Street, next to Snow Hill railway station. A 19-year-old man was critically injured and a woman was also injured.
An hour later at 1.50am, officers were called to Irving Street, to the south of the city centre near the O2 Academy, where a man died and another man suffered serious injuries.
Ten minutes later police were called to Hurst Street, in the heart of the city’s Gay Village quarter, where a 32-year-old woman was seriously injured and two men received lesser injuries.
Birmingham Police Commander, Chief Superintendent Steve Graham, said: “Officers worked through yesterday and into the early hours of this morning in a bid to trace the man we believe responsible for these terrible crimes.
“We issued CCTV footage of the suspect and had a strong response from the public. I’d like to thank everyone who shared our appeal and who provided information to the investigation.
“One line of enquiry ultimately led us to an address in the Selly Oak area this morning where a man was arrested.
“Clearly this is a crucial development but our investigation continues. We still need to speak to any witnesses who saw what happened who’ve not yet spoken to us, or anyone who may have video footage or photos of the incidents or the attacker.
“We have a hotline number and a dedicated web page where you can submit information, photos and videos."
A Hotline has been set up for anyone with information to call 0800 056 0944.