More than a dozen police squad cars were scrambled to the Gypsy Queen pub, on Drake House Lane, Crystal Peaks, at around 10pm last night.
Residents they heard sounds of screaming and glass breaking in the car park just before police arrived.
Police have now confirmed that a man was rushed to hospital after being stabbed and has died from his injuries.
The victim has been named locally as Coley Byrne, 26, who is a dad in the local area.
Flowers have been laid outside the pub today.
One man who arrived to lay his own said: “I’m devastated. He was one of the loveliest guys you could meet. I don’t believe it.”
A resident on Drake House Lane said: “It was sirens galore, just police car after police car arriving.
"It sounded like a right scuffle in the car park. There was a lot of screaming and I heard a lot of glass breaking and crashing.”
South Yorkshire Police said the victim was taken to hospital but sadly later died from his injuries.
DCI Mick Hakin, the officer leading the investigation, said: "We are looking to speak to anyone who may have been in the Gypsy Queen at the time and who may have seen anything that can help us determine exactly what happened which led to the death of a young man."
Anyone with information which could assist with police enquiries is asked to call 101, quoting incident number 845 of 26 December.