Police were called to report a suspicious package to an address in Cricklewood, north London, around 9:10 a.m. BST on Thursday.
The package turned out to be a small improvised explosive device.
A man was arrested on suspicion of attempting to cause an explosion or of making or storing explosives with intent to endanger life or property.
The man in his 20s was arrested at an address in Cambridge and taken into custody by counter-terrorism police.
Met police said two addresses were searched in Cambridge.