One teen is dead and another is in custody after a fatal stabbing Sunday at a townhouse in Sherwood Park, Alta.

RCMP say they were called to a townhouse on Oak Street at about 3 a.m. Sunday, where they found the victim, 18, suffering from stab wounds. He was taken to hospital where he later died.

"A short time later, a suspect was arrested nearby close to the Sherwood Park Mall and taken into custody," said Const. Wally Henry with the Sherwood Park RCMP.

He said there was a group of people at the townhouse at the time of the stabbing.

A neighbour said she woke up to hear someone screaming for an ambulance.

Melissa Erickson looked out her bedroom window and saw a man lying on the ground suffering from a stab wound.

"All I heard was 'Call the ambulance, call the ambulance, he got stabbed, he got stabbed.' And … they took him off in the ambulance. Well, it was scary," she said.  

Henry said the victim and the suspect, 18, knew each other.

No charges have been laid.

This is Sherwood Park's third homicide of the year.