The man injured two police officers seriously, one in the neck and one in the chest. A 69-year-old Portuguese man who tried to intervene was stabbed and killed, BBC reported.
The suspect was subject to a deportation order because he was on a terrorism watch list, according to the local prosecutor.
The attack took place at about 16:00 local time (15:00 GMT) on Saturday near a busy market in Mulhouse, which is close to the borders with Germany and Switzerland.
Of the two officers taken to hospital, the one injured to the chest was later discharged, prosecutors told the AFP news agency, while three others suffered minor injuries.
SD/
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