The 18-year-old is receiving treatment in hospital after the attack in Stanks Parade, Swarcliffe, Leeds, at 9.31pm on Tuesday.
A West Yorkshire Police spokesman said: "Police are appealing for information after a man was attacked with a machete and seriously injured in an incident in Leeds.
"At 9.31pm last night, police were called to Stanks Parade, Swarcliffe, where an 18-year-old man had been found with his hand completely severed.
"He was taken to hospital by ambulance for emergency treatment."
Than man's condition is not thought to be life-threatening.
"We recognise that an incident such as this will cause understandable concern in the community and we are liaising closely with our colleagues on the local neighbourhood policing team who are updating their community representatives and maintaining a visible presence in the area to reassure people."
Police said a large scene will remain in place around Stanks Parade while forensic examination and specialist searches take place.
Anyone who saw any of the incident or who has any information that could help the investigation is asked to contact police, or Crimestoppers anonymously on 0800 555111.