The 20-year-old fought off her attacker just yards from homes on Meadow Lane, at 6.50am yesterday.
The woman was grabbed from behind and was pushed to the ground by the man.
Neighbours heard the victim’s screams and the attacker was disturbed.
He then ran off towards Preston Road.
Det Insp Gareth Willis, of Blackpool CID, said: “Only through the woman’s actions and the intervention of neighbours has the man stopped.
“The young woman fought back – she struck him and she screamed. It is her actions which have alerted neighbours. She has been very, very brave.
“I think had it not been for that the incident could have been much worse.
“We are continuing to support the young woman who has suffered a particularly distressing ordeal.”
A 23-year-old man from Blackpool has been arrested on suspicion of attempted rape and is currently in custody.
Neighbours on the adjoining Mornington Road and Meadow Lane said the incident was “particularly shocking”.
Tim Mansfield, of Mornington Road said: “It’s terrible, it really is. I didn’t hear anything, but you just don’t expect things like this to happen around here.
“It’s an alarming incident.”
David Kingham, 74, added: “I have lived on Mornington Road for 47 years and never known anything like this.
“It’s awful, it really is. The first I was told of it was by police.
“It’s a very serious incident, clearly. Round here it is so quiet – you couldn’t imagine anything happening like this.”
Meadow Lane resident Warren Humphries, 34, said: “There was an ambulance and a police van as well as police tape. It’s pretty shocking.”
Police are looking for information about a man described as white, in his 20s, of slim build and with “olive skin”.
He has stubble on his face and short dark hair and was wearing dark clothes and a hooded top.
Det Insp Willis added: “I would appeal to anyone in the area who may have noticed any suspicious activity in and around Mornington Road and Meadow Lane to come forward and contact us.
“We’ve made an arrest in connection with this incident but I would stress we are very keen to speak to anyone at all that has any information who has not yet contacted us.”
Anybody with any information can contact Blackpool CID on 101 or Crimestoppers on 0800 555111.