The stabbing happened at about 6:15 p.m. behind Perry's Delicatessen at 909 Lincoln Ave.
Police said two men were arguing behind the deli when one suddenly stabbed the other in the chest, then fled in a pickup truck parked nearby.
Paramedics responded and took the victim to Marin General Hospital.
An eyewitness to the stabbing gave police information that pointed them toward Wenceslao Castillo-Hernandez, 43.
Castillo-Hernandez was arrested at his apartment in the 300 block of Bayview Street, near Gerstle Park, at about 1:30 a.m. today, police said.
Anyone with information on the case is asked to call San Rafael police at (415) 485-3000 or Crime Stoppers at (800) 222-TIPS.
Tips can also be made online by visiting www.bayareacrimestoppers.com.