Police were called to the reports of the stabbing at London Central Mosque near Regent’s Park shortly after 3pm today.
Dramatic pictures show the man sitting cross-legged on the floor as he was arrested on suspicion of attempted murder.
The victim, in his 70s, was rushed to hospital but his injuries are not believed to be life-threatening.
Police remain at the scene and an investigation has been launched.
Around 300 people are believed to have been in the mosque when the attack took place.
“We heard the Iman, he was screaming. We did not know what was going on.
“The muadhin fell on the floor with a scream. He had lots of blood here [points near shoulder].
“We could see a lot of blood. He stabbed him.one time.
“It was like a small kitchen knife, about five inches.
“People jumped on him. One person kicked him in the back then he put him on the floor.”
In a video message posted on Twitter, the eye-witness said: “The Imam, before he led the Salat (Muslim prayer), all of a sudden this racist, terrorist person came and stabbed him on his neck.
“He was actually going for the Imam, to stab the Imam, but the Muezzin was trying to protect. And then he got stabbed in the neck.
“This is a very, very scary scenario.”
The suspect was pictured not wearing shoes – suggesting he may have gained access as a worshipper.
Central London Mosque is one of the biggest in the country and can hold up to 5,000 people.
Prime Minister Boris Johnson said he was “deeply saddened” by news of the attack.
He said: “I’m deeply saddened to hear of the attack at the London Central Mosque.
“It’s so awful that this should happen, especially in a place of worship.
“My thoughts are with the victim and all those affected.”
The incident comes nearly two years after Darren Osborne launched an attack outside a mosque in Finsbury Park, North London.
He was jailed for life after ploughing a rental van into worshippers on June 19, 2017, and left a 51-year-old man dead with nine others injured.
Yesterday, a far-right conspiracy theorist gunned down nine people at two different shisha bars in Germany.
Tobias Rathjen, 43, who boasted about “ethnic cleansing” opened fire in Hanau before killing his mum and himself last night.
The incident has not yet been declared as terror-related but the Met Police’s SO15 counter terror unit are believed to be investigating.
A Met Police spokesman said: “Police were called to a mosque in Park Road at 3.10pm to reports of a stabbing.
“Officers attended along with paramedics from the London Ambulance Service. A man, in his 70s, was found with stab injuries.