The shooting happened just before 2:00 a.m. when police responded to a domestic dispute at the Chateau Orleans apartment complex, located near Philadelphia Pike and Shipley Road in Brandywine Hundred.
Police say the suspect, Eric Weit, 34, threatened to kill his girlfriend.
While searching the complex for the suspect, officers heard a single gunshot in a nearby wooded area.
Officers sent in a K9, Diablo.
"Not only did Diablo engage this individual, but after the shots were fired and after the officer called Diablo back, Diablo came back and collapsed," said Cpl. Trinidad Navarro of the New Castle County Police.
Diablo's partner scooped up the animal in his arms in an effort to stop the bleeding from gunshot wounds to his torso and leg. He was taken to the University of Pennsylvania Animal Hospital and underwent successful surgery Wednesday night.
"He is an absolutely brave dog," Doctor Elaine Holmes said.
Dr. Holmes said Diablo needed a plate inserted in his leg due to a shattered bone. The plate will stay in his leg for the next few months until the bone grows back.
Meanwhile, as officers approached Weit, they say several gunshots went off. Three officers then opened fire on Weit, striking him multiple times in the upper and lower torso.
Weit was then flown to Christiana Hospital where he underwent surgery.
Diablo's handler was also involved in the exchange of gunfire, and police say he is heartbroken about his wounded partner.
"It's a very emotional situation right now. Not only it's the shooting, but it's a family member involved," said Sr. Cpl. Mark Tobin.
Doctors say it will be at least five months before they can say whether or not Diablo will return to police work.