The number of people caught carrying a knife fell 7% in the first three months of 2009, the latest figures have shown.
The Ministry of Justice also said proportionately more adults possessing knives in England and Wales went to jail - and for longer - than before.
There was also a 70% rise in suspended sentences for knife possession and more offenders given community sentences.
The changes come after senior judges and the prime minister called for longer sentences for knife offences.
The quarterly figures for possession of a knife or other offensive weapon compare the months from January to March 2009 with the same period last year.
Over the three months, the total number of cases being disposed of - meaning a caution or a sentence was handed out - fell to 6,477 compared with 6,931 last year.
The statistics also showed police and the courts dealt with 1,359 offences among juvenile offenders, compared with nearly 1,600 the previous year.
The 15% drop among young offenders was greater than among other parts of the population.
Last year the Court of Appeal told magistrates to deliver longer sentences for knife crimes.
NUMBER OF OFFENCES INVOLVING POSSESSION OF A KNIFE
Tackling Knives Action Programme forces are:
Prime Minister Gordon Brown later said there should be a presumption of prison or "strong community payback".
According to the figures, about a quarter of all cases - 1,599 - ended in a caution in the first three months of the year. This was down from just over a third of offences - 2,394 - in 2008.
Meanwhile 20% of all possession offences, some 1,320 cases, resulted in a prison sentence, up from 17% over the same period last year.
But among juveniles, just 6% of those caught with a knife - 86 offenders - were jailed. This was the same proportion as last year.
Following the Court of Appeal ruling the length of sentences has also increased, as expected.
Between January and March this year 383 sentences were for more than six months - more than double the 169 sentences handed out in the same period of 2008.
The government made knife crime a priority in June last year, launching its "Tackling Knives Action Programme" (TKAP) to crack down on offending in key areas. The accuracy of some of the initial figures linked to TKAP areas has faced criticism.
The latest figures show the changes in knife possession are happening in roughly the same way across all of England and Wales, rather than just in the 10 urban areas targeted under TKAP.
The 10 TKAP areas saw 3,354 possession offences over the three months - a fall of 8% on the previous year. All the other police forces together dealt with 3,123 offences, a fall of 5%.
While there were far more immediate jailings in the TKAP areas - up 23% on last year to almost 750 cases - the average sentence in all areas of England and Wales was almost identical at just over six months.