The Booker Prize winner, 75, was speaking at an event at the Chautauqua Institution at the time.
New York State Police said a man ran up onto the stage and attacked Mr Rushdie and an interviewer.
Police detained a suspect named as Hadi Matar, 24, from Fairview, New Jersey.
No motive or charges have yet been confirmed by police.
Mr Rushdie was stabbed at least once in the neck, and at least once in the abdomen. He was taken to a hospital in Erie, Pennsylvania, by helicopter.
The writer has been undergoing surgery, police and his agent confirmed.