The stabbing happened around 9:20 am at Osborne Park on Bellevue Road near Brownell Street.
When officers arrived, they found a 36-year-old man with stab wounds and other injuries.
Officers say the suspect, 42-year-old David Lucas, stabbed the man and hit him with the metal horseshoe during a fight.
The victim was airlifted to the hospital in critical condition.
Lucas was arrested and booked into the Merced County Jail on a charge of attempted murder.
Investigators say Lucas and the victim are both members of the unhoused community.