The incident took place on Church Street during a brawl involving up to 20 people. The teenager is being treated in hospital for life threatening injuries.
An eyewitness reported the victim was attacked by six people before being stabbed.
A spokeswoman for Greater Manchester Police said: “Officers were called around 9.15pm on Friday February 19 to Church Street, Westhoughton following a report of a disturbance and what was believed to be a large group of people fighting.
“Officers attended and enquiries established a large group had gathered at the location and one male, aged 17, had been stabbed.
“He was taken to hospital with injuries that are believed to be life threatening.
“No arrests have been made and enquiries are ongoing.”
Liv Clarke, from The Bolton News, reports police were still on the scene on Saturday morning with part of Market Street closed.
A photograph she posted on Twitter shows a police car blocking a road with police crime scene tape behind.
Speaking to The Bolton News Jack Morris, a 19-year-old eyewitness, described the attack.
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“He was in a bad way, on the floor and a lot of blood.
“This was at about 9.30pm. I stayed with him until the ambulance arrived.
“It seemed to take a long time for the ambulance and police to arrive.”
Sharon Williams, who works nearby, described the aftermath of the attack.
She commented: “I was driving through the junction, coming down towards Casa Nostra, I looked at the cemetery as I was parked at the lights, I heard music, there was a gang of kids at yard, playing loud music, gathered together.
“I wondered if someone had died at first, maybe a vigil.
“But then I looked at the other side and there were about eight kids outside Casa Nostra, I did think it was a bit weird.
“I’ve got family buried in the cemetery so I always look over. Obviously later I saw the Facebook post and thought that was shocking.
“There must’ve been around 20 lads there. It made me feel a bit uneasy, you feel something’s not right. I was really sad to hear about what had happened this morning.”
Police are urging anyone with information about the attack to contact them on 0161 856 5757 quoting 2882 of 19/02/21.
You can also pass on information anonymously via Crimestoppers, an independent charity, via 0800 555 111.”