The 28-year-old and a 32-year-old, both from Portsmouth, are in custody.
Police have appealed for calm after the death, which happened in the early hours of this morning.
Chief Inspector Marcus Cator said: ‘We understand the community will be concerned about the incident in the city overnight in which a young man lost his life.
‘Detectives are working hard to establish the circumstances and have since made two arrests.
‘Officers will be maintaining a presence around Fratton and Southsea throughout the weekend to carry out enquiries, but also to listen to your concerns.
‘If you have any concerns or information which could help us keep your community safer then please do speak to us.
‘In addition, we continue to appeal for information relating to last night’s incident.’
Police were called at 2.18am today by paramedics who had been sent to Sackville Street in Southsea this morning.
The 18-year-old is thought to have been assaulted in Fratton earlier in the night.
He was taken to Queen Alexandra Hospital and later died.
Anyone with information is asked to contact police on 101, quoting Operation Lighter, or call the charity Crimestoppers anonymously on 0800 555 111.