The attack occurred at the intersection of Samish Way and Fielding Ave. early Saturday morning after a party at a nearby home.
Bellingham police spokesman Mark Young says the two victims were brought to PeaceHealth Saint Joseph Hospital by a private vehicle.
An 18-year-old victim survived with wounds to his face, but a 17-year-old died.
Young says officers were at the home interviewing witnesses when the suspect opened the door and walked in.
He was covered in mud and had what appeared to be blood on his clothing.
Young says the suspect immediately ran, but officers were able to chase him down.
21-year-old Geoff Spain was arrested and booked into Whatcom County Jail.
Anyone with information about the stabbing is asked to contact Bellingham Police.