The incident happened around 7:45 p.m., at a clothing store on Third Avenue near 102nd Street.
Police says the suspect used the chain to hit one person on the street before running into the clothing store.
A housing officer followed him and repeatedly ordered him to drop the chain, but authorities say the man lunged at the officer at the entrance. He swung the chain, and the officer shot him in the midsection.
After falling backwards inside the open door of the store, police say the man got to his feet and, still armed with the chain, continued to advance on the officer and responding back-up officers.
The man was sprayed twice with pepper spray to no apparent effect, and was finally restrained by additional responding officers who surrounded him, brought him to the store floor, disarmed him and took him into custody.
The suspect is in serious but stable condition at St Luke's Hospital.
His identify is unknown at this time. He had no identification of any kind, and his fingerprints produced no results.