Police did not announce any motive for the attack and appealed to the public for information.
Lau, 49, was named editor of the respected Ming Pao newspaper in 2012 but was replaced last month by a Malaysian journalist with no local experience. Lau was transferred to the parent company's electronic publishing unit. The move raised fears among journalists that the newspaper's owners were moving to curb aggressive reporting on human rights and corruption in China.
The Hong Kong Journalists Association said it was shocked and angered by the attack, calling it a "serious provocation to Hong Kong press freedom." Hong Kong leader Leung Chun-ying visited Lau at the hospital and told reporters, "We strongly condemn this savage act."
Freedom of speech and the press is a growing concern in the semiautonomous Chinese city, where such rights are guaranteed by its mini-constitution. On Sunday, thousands of people took to the streets to protest Lau's dismissal and other recent cases, including the ouster of an outspoken radio host and reports that Beijing-backed businesses were pulling ads from some newspapers over editorial stances.
Hong Kong slipped three places to 61st place on the latest World Press Freedom Index compiled by media watchdog Reporters Without Borders, which said Beijing's growing influence is jeopardizing media independence. Hong Kong ranked 18th on the group's inaugural index In 2002.