Washington won for the fifth time in six games and was led by 25 points and 13 rebounds from Antawn Jamison. Arenas scored 20 points in bringing the Wizards back from an 11-point, third-quarter deficit.
New York had beaten Washington in each of their last six meetings.
The Knicks, who have lost four out of five, was led by 20 points from Nazr Mohammed.
New York's Allan Houston, playing for the first time this year, scored eight points. He has been recovering from knee surgery.
Tim Thomas gave the Kicks their final lead at 104-101 on a three-pointer with 1:37 remaining. Jamison brought the Wizards within one and Haywood then scored the game-winner.