Ever Orozco, 69, was stabbed to death near the 90th Street-Elmhurst Ave. 7 train station about 1 p.m., the NYPD said.
Following the incident, group of onlookers chased after the 22-year-old suspect, Steven Torres, and plainclothes officers arrested him about six blocks away, authorities said.
Orozco was taken to Elmhurst Hospital and pronounced dead, police said.
Torres stabbed Orozco because he believed Orozco was making a sexual advance at him, a police spokesman said. A suspect can be charged with a hate crime whether or not the victim is gay.
Witnesses described a chaotic scene on the street after the violence.
Torres was charged with murder as a hate crime and criminal possession of a weapon, cops said.
"I saw a gentleman running with people pursuing him,” said James Brown, 36, of Manhattan, who was walking on Roosevelt Avenue at the time.
“The guy appeared to be jogging, but people were running after him."
Another witness, who was inside a pharmacy next to the station at the time of the stabbing, said she was still in shock.
Veronica Cajamarca, 41, of Corona, was with her 15-year-old son as the attacker fled past the store, she said.
"I'm glad I was in the pharmacy. How horrible if he came out to attack us?" Cajamarca said.
Queens state Sen. Jose Peralta applauded the police and witnesses who chased the suspect down, noting that the area has been plagued by violence.
"Roosevelt Avenue is often called the old Times Square," he said in a statement.
"That's how serious and deeply entrenched the problems are on Roosevelt Avenue. As I've said repeatedly over the years, what Roosevelt Avenue needs most is a level of commitment from city and state government as determined as what was invested in the transformation of Times Square."