The 43-year-old man was attacked just after 9.15pm on Friday, leaving blood splattered on Morningside Rd.
Whangarei police sergeant Howard Clement said the man had "significant injuries" to his face and body.
He was taken by ambulance to Whangarei Hospital, where he had surgery yesterday afternoon.
Last night, he was in a satisfactory condition.
Clement said police arrested a 31-year-old man near the scene of the attack. He appeared in the Whangarei District Court yesterday and was remanded in custody without plea until tomorrow.
Harris said she rushed outside after hearing the chainsaw, and discovered two men arguing.
"There was a major argument going on down there, and since it involved a chainsaw I thought I better call the police. Things can escalate so fast."
She said she did not fear for her safety as she was hidden in the darkness.
By the time police arrived, the chainsaw had been turned off and a man and a woman were arguing on the street.
Police are asking any witnesses to the attack to telephone them on (09) 430-4500.