Police were called to the unit on Sutton Street in North Melbourne about 11.40am on Saturday, where they found the man with stab wounds.
Emergency services carried out CPR on the victim, who was then taken to hospital where he later died.
Victoria Police said a 30-year-old Dallas man has been arrested and is assisting with its enquiries.
Critical incident response team officers had deployed non-lethal force to subdue the suspect who was then taken into custody, police said.
Police said the two men were believed to have known each other.