Armed police officers were called after an attack in the town centre, a spokesman has confirmed.
Earlier, residents of Thenford Street, off Billing Road, had reported seeing armed officers on the street surrounding a house.
Mental health manager Dan Lynch, 33, saw the tactical unit race into Thenford Street at about 5.10pm.
He said: "I saw all the armed response teams, everyone had machine guns. They were shouting 'armed police' into each of the houses.
"They must have been outside for five or 10 minutes before they went into the house. All I saw was them by the doorway, I didn't see them go in.
"There must have been 16 police officers and they had a man in handcuffs."
Police have confirmed to the Chron that the operation was in response to an alleged attack using a noxious substance. They stressed the substance was not acid, however.
Firefighters were also called to the scene to assist with large volumes of water in the event of a substance being used.
A 25-year-old man has been taken to hospital suffering from skin irritation.
A 24-year-old man has been arrested for possession of an offensive weapon.
This incident is being linked by police to another which took place nearby.
Detective Sergeant Johnny Campbell said: “The noxious substance used was not believed to be an acid.
“We have made one arrest and believe this was a targeted attack.”
Witnesses or anyone with information are asked to call Northamptonshire Police on 101 or contact Crimestoppers anonymously on 0800 555111.