Two men, aged 23 and 27 who were known to each other and to police, were hospitalised after the incident, which police described as a "significant and violent confrontation".

Emergency services arrived to the Shalistan Street home about 1.50am, where they found a 23-year-old resident with multiple stab wounds to his upper chest.

He was taken to John Hunter Hospital and Hunter Valley Police District crime manager Detective Inspector Matt Zimmer said he was in a stable condition late Friday morning.

The 27-year-old man turned up at Maitland Hospital with multiple stab wounds to the neck. He was rushed to John Hunter, where he was undergoing emergency surgery. Police said he was in a critical but stable condition.

Police were still waiting to speak to the men on Friday morning and Detective Inspector Zimmer said officers were still trying to establish the circumstances of how the incident occurred and what was behind it.

Another resident, who is the father of the 23-year-old, was home at the time of the incident and has been interviewed by police.

Detectives and forensic police spent the morning combing the house and street as part of investigations into the incident.

Blood could be seen on a vehicle parked in the driveway of the home and police sectioned off several surrounding homes as part of the crime scene. A knife which police allege was used in the incident was seized from the garage of the residence.

Neighbours said they heard very little at the time of the stabbing, but were shocked to awake to the news of what happened.

Patricia Gray said she heard a noise like a glass door slamming and got up to investigate but didn't see of hear anything further.

Her daughter Denise slept through the incident, but said she had not experienced anything like it in the 12 months she's lived in her home.

"You hear cars coming and going at night, but you don't hear arguments or anything like this," she said.

"It's a really quiet neighbourhood, especially because we all live so close together."