A doorman received serious eye and facial injuries when he was allegedly struck with a glass during the incident which occurred at around 11 pm at the Central Bar on the town’s Main Street.
It is believed the victim was working at the bar when he was approached by a man.
There was an exchange of words and it is understood a glass was produced and the doorman was struck.
He was rushed to Letterkenny General Hospital where he was treated for a serious eye injury and cuts to his face.
A man, understood to be from Derry, was arrested nearby a short-time later and was taken to Letterkenny Garda station where he was still being detained last night.
Gardai have launched a full investigation into the incident and are appealing for witnesses to come forward.
Anyone with information should contact Letterkenny Garda Station on 07491 67100.