The 39-year-old was arrested last night over the murder of 21-year-old Lewis Bagshaw, who was knifed in his chest on Sunday night.
He remains in police custody this morning.
Lewis was found injured in Piper Crescent, Southey, and was taken to hospital but could not be saved.
Residents claim Lewis staggered into their street seeking help after being attacked elsewhere.
Police cordons remain in place in Piper Crescent and nearby Southey Green Road this morning.
Anyone with information should call South Yorkshire Police on 101 and quote incident 1,085 of July 21 or Crimestoppers, anonymously, on 0800 555111.