The unidentified youngster brandished the knife in the middle of the road near a school in the West Yorkshire town.
In the footage the young man can be seen waving around the machete as another youth edges closer to him.
The incident, which took place down New Hey Road, spilled over into the street close to Huddersfield New College.
A woman who witnessed the shocking incident said she believed one of the attackers had managed to land a blow on another youth.