Armed officers were called to Elm Road at Armthorpe shortly before 5.30pm when residents reported a man was carrying the weapon.
Five South Yorkshire Police armed response units, the National Police Air Service helicopter and 'numerous' armed officers were sent to the street following the reports.
The 32-year-old white man was taken into custody, and a police spokesman said he caused 'no trouble' during the arrest.
The spokesman said officers in the helicopter spotted the man discarding the machete.
The man is a friend of a resident on the street, the spokesman said.
No one was injured in the incident.