The driver, who does not wish to be named, was robbed of £95 and his NEC mobile phone during the attack, which police say left him "mentally traumatised".
The horrifying attack took place along Balliol Way during the early hours of Saturday morning.
A woman is thought to have ordered the taxi at 1.20am - but when the driver arrived a man appeared, wearing a stocking over his face.
He approached the taxi, opened the front passenger door and threatened the driver with the large knife.
Police said the victim was not injured in the attack but has been left shocked and shaken.
The thief made off on foot with the money and phone.
He is described as 5ft 11ins and skinny. Police are now appealing for witnesses to what they described as a "very serious incident".
WDC Jayne Payne of Bracknell CID said: "This was a particularly nasty incident and we are appealing for anyone who may be able to help us catch who is responsible to get in touch with police immediately.
"This was a very serious incident where violence was used and the victim was left mentally trauma-tised."
Anyone with information should call WDC Payne on (01344) 823508 or call Crimestoppers anonymously on 0800 555 111.
Police are not linking the attack to an assault on a pizza-delivery man, from Sandhurst's Domino's restaurant, who was called out to an address in Yeovil Road, Owlsmoor, at 12.30am on Saturday, March 9.
As he approached the house he was hit over the head twice with a heavy instrument but managed to fight off the assailant, who escaped with two pizzas.
The attacker is described as black, aged around 18 years old, 5ft 11ins to 6ft and of broad build.
The residents of the house had not ordered the pizza and were said to be shaken by the incident.