Waukegan police said a large law enforcement presence was assigned to security for the event.
The shooting happened around 7 p.m. on the south side of a building at 20 South Genesee Street, next to a private parking lot, police said.
Police believe both the victim and the suspect, identified as Willie J. White, a 36-year-old Harvey man, were attending the festival on foot when they became involved in an altercation.
Shots were fired, and the victim, a man in his late 30s, was treated on the scene before being transported to a local hospital, where he remains stable, police said.
No one else was involved in the incident, which was isolated, police said.
White was arrested around 5:30 p.m. Tuesday and has been charged with attempted first-degree murder and aggravated battery with a firearm. Investigators recovered a gun during his arrest.
The event, which was in its second and final day, ended early due to the shooting.