Degley Davies, 14, pulled his pal from the Shropshire Union Canal after spotting a hand reaching up out of the water.
The boys had been riding home to St Martins, near Oswestry, after a trip to a skate park in Chirk when the dramatic incident took place last Sunday.
Degley’s friend was trapped under his bike as it was sinking in the water, and cold water shock stopped him from being able to free himself and swim to safety. But Degley was on hand to pull him out, rescue the bike and warm up his friend after experiencing the freezing temperatures.
The scare shook up the youngsters, who are pupils at St Martins School, but thankfully they are all okay.
Degley's proud mum Sabrina said that his friend's mother keeps calling him her "hero".
"They had cycled to Chirk from St Martins because they like the skate park there," she said. "They take their skateboards and go on the jumps.
"They came home the canal way because they wanted to avoid the main road and the cars. One of Degley's friends was riding at the front and another at the back because one had a stronger front light and the other had a stronger back light.
"They were riding along and suddenly Degley noticed that his friend had disappeared. He looked into the canal and all he could see was a hand reaching up.
"He just grabbed his hand and pulled as hard as he could. His other friend was trying to warm him up. Degley saw the bike and pulled that out of the canal as well.
"He did so well, for a 14-year-old to react like that. He is the sort of lad who if he saw someone in trouble he would always help."
She added: "It shook him up a bit. I don't think he quite realised that he'd saved his friend's life. The canal is really deep. His friend's mum keeps going up to him saying 'you're my hero'. The boy who fell in was a bit poorly for a few days but he's better now."
Sabrina hopes it serves as a warning for anyone riding at night to be extra careful and to wear proper safety gear, to prevent a possible tragedy.
"They are good lads. They had lights on their bikes but I don't think they were wearing helmets or bright clothing. They are not normally out on their bikes late at night. They were a bit late coming home. It would have helped if they had bright clothing on, and you should have the correct safety equipment."