The youngster has been named locally as Fola Orebiyi. It is thought a fight broke out on a nearby estate and the teen was chased down the street by youths on bikes.
One resident told of the “awful” scene at about 8.45pm on Sunday night.
The elderly woman, who wished to remain anonymous, said: “I was watching TV when I heard an awful commotion downstairs.
“I watched out of the window and could see the reflection of a police car. There were loads of people including paramedics with orange vests on.
“There was a crowd of people watching. We could see paramedics working on him, there was blood everywhere.
“Then, suddenly, they all stepped back and we knew they didn’t step back because he’d survived.
“A young boy was murdered here. It is such a waste of a child’s life. It’s just awful.”
Paramedics worked on the boy outside La Cave, a cheese shop, and Delehar Antiques store, but was pronounced dead at the scene.
The woman said this part of Portobello Road has a low level of crime. She said: “This is a low crime area, not so much as a pick pocket comes by here.”
She said she thought the boy, believed to be a student at Holland Park Sixth Form, was of West African origin.
Flowers have been lain as a tribute to the boy near by the scene of the incident.
Bank manager Yousef said: “I had absolutely no clue anything happened last night. How sad, I cannot believe it.”
Keanu Hayden-Smith wrote on Facebook late on Sunday: “RIP Fola Orebiyi”.
Metropolitan Police have launched a murder inquiry following the death.
A spokesperson said: “Police were called at approximately 8.45pm on Sunday, 3 July, to Portobello Road, by London Ambulance Service to reports of a man being stabbed.
“Officers attended the scene and immediately implemented first aid and CPR to an injured male. London Ambulance Service and London Air Ambulance arrived shortly after.
“The victim – a 16-year-old boy – was pronounced dead at the scene. Next of kin are aware. A post mortem examination will be arranged in due course.
“Officers from the Homicide and Major Crime Command investigate. No arrests have been made and enquiries continue.”