RNZ understands the driver objected to loud music being played, although police were yet to establish the exact circumstances.
The investigation was launched after a man arrived at Christchurch Hospital with critical stab wounds.
Enquiries revealed he was injured when two cars were parked at a red light and the driver got out of one of the vehicles and attacked one of four passengers in another car.
Detective Sergeant James Haigh said the stabbing happened at the intersection of Clarence Street and Blenheim Road in Riccarton at 5.40pm Thursday.
The offender then fled, Haigh said.
The 26-year-old suspect was arrested thanks to "CCTV footage, information from the public and some good investigative work", Det Sgt Haigh said.
He is due to appear in the Christchurch District Court tomorrow on a charge of wounding with intent to cause grievous bodily harm.
The victim remains in Christchurch Hospital in a critical condition.
