Gwent Police said they received several calls from the public reporting a group of youths with guns in the town’s Wern Road area around 3 p.m. Sunday.
Armed officers attended the scene as a precaution and a baseball bat and metal bars were recovered.
The force said those arrested were still in custody and no injuries had been reported.
A spokesperson said a 24-hour dispersal order had been issued for downtown Cwmbran.
The order is for Cwmbran Town Shopping Center and Cwmbran Retail Park and will be in effect until 5.15pm on Monday.
The order gives officers additional powers to order such groups to leave the area if their behavior is likely to contribute to the disorder or cause harassment, alarm or distress to members of the public. Individuals are at risk of arrest if they return to the area after being displaced, a spokesperson said.
Chief Superintendent Mark Hobrough said: “This appears to be an isolated incident involving young people in the area. We have made a number of arrests and officers will maintain a visible presence in the area this evening to reassure us.
“This type of behavior will not be tolerated by Gwent Police and we will take action against anyone who intends to harm our communities.
“We ask parents to make sure they know the whereabouts of their children at all times, especially while the disperse order is in effect.”