A woman who objected to a man sitting next to her on a Sydney train pulled out a chisel and threatened to stab him, according to a witness who recorded the terrifying Boxing Day encounter on a mobile phone.

The woman is shown in the footage advancing towards the man with the weapon and yelling "I'll stab you, dog!", before another male passenger tackles her onto the train seat and disarms her just after midday on Saturday.

The woman falls onto a young girl, who was sitting on an aisle seat on the the Bankstown Line train.

A witness said the dispute started because the woman, who was sitting next to the window, objected to the man sitting two seats away from her, on the aisle. There was a vacant seat between the pair.