Two men are due to face court, while a third man is being sought following the alleged assault of a 63-year-old man with a chainsaw in Sydney's inner west.

Police allege three men entered an Annandale unit on Monday evening where they were confronted by the older man and his wife before being chased outside.

One of the trio allegedly grabbed an electric chainsaw from a nearby garage and assaulted the older man before the group ran off, with police later arresting two of the men in a nearby hotel.

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Two men will face court and a third is being sought following an alleged assault with a chainsaw in inner Sydney. Source: 7 News

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The 63-year-old man remains in Royal Prince Alfred Hospital receiving treatment for a laceration to his head. Source: 7 News

A 21-year-old man and a 20-year-old man were refused bail and will appear in Newtown Local Court on Tuesday where they face several charges, including assault.

The 63-year-old man remains in Royal Prince Alfred Hospital receiving treatment for a laceration to his head.

Police continue their search for the third man.