The incident started with an argument between the two boys in a west side Detroit neighborhood Monday afternoon and ended early this morning with the stabbing.
The 10-year-old was taken to a local hospital where he is in stable condition with non life-threatening injuries.
"(I saw) a bunch of police, EMS, and them bringing a baby out," said a neighbor Cristina Smith.
Also taken to the hospital was his younger brother, who is receiving a psychiatric evaluation.
Detroit police tell us that the children's mother was home and is cooperating in the investigation. But the family declined comment.
"At this time the family would like their privacy," said a family friend at their house. "They have no comment or further information, thank you."
The mother also has two other children and police say all four kids, boys ages 7, 8, 10 and 11, were in the room when the alleged stabbing took place.
The incident is now being investigated by the state's Department of Health Services.
"We're just following standard procedures," said Darrell Motley of DHS. "We're not allowed to discuss the confidentiality of what's going on."
Police are investigating the case, they want to review the psychological report of the 8-year-old and depending on that report and other evidence, there may or may not be criminal charges.
That's because of the child's young age.
"They are good kids, maybe it was just an accident, you don't know," Smith said.