Officers were called to reports of a burglary in progress at around 12.45am on Wednesday after two men entered a house in South Park Crescent in Hither Green, south-east London, the Metropolitan Police said.
One suspect, armed with a screwdriver, forced the 78-year-old home-owner into his kitchen when he discovered them, while his accomplice went upstairs, the force said.
Detectives believe a struggle ensued between “one of the males and the home-owner” and the 38-year-old intruder was stabbed in the upper body.
He was later found collapsed in nearby Further Green Road by paramedics from London Ambulance Service, who took him to a central London hospital where he died at 3.37am.
Police were unable to confirm whether the suspect had been stabbed with the screwdriver.
The pensioner, who suffered bruising to his arms, was initially arrested on suspicion of grievous bodily harm but has been further arrested on suspicion of murder, the Met said.
He remains in custody at a south London police station.
The second suspect fled the scene and has yet to be found.
The dead suspect’s next of kin have been informed and a formal identification is due to take place. A post-mortem examination will be carried out in due course.
Anyone with information is asked to contact police on 101 quoting CAD214/4Apr. To remain anonymous they can call Crimestoppers on 0800 555 111.