Officers responded to K Street between 22nd and 23rd Streets just after 11 p.m.
Police say the two men were walking along the sidewalk when the stabbing occurred.
One of the victims suffered multiple stab wounds and was rushed to a nearby hospital. The other man declined treatment for his injuries.
Information about a possible suspect was not immediately available. Police are asking for witnesses to come forward with any details on the crime.
Anyone with information is asked to call the Merced Police Department.