The men 39, and 34, were targeted by police on Tuesday (April 1) after investigations into Hezbollah activity in the UK, which is a Shia Islamist political party based in Lebanon.
The 39-year-old was arrested at an address in north west London on suspicion of being a member of the organisation, preparing for acts of terrorising and being involved in a funding arrangement for the purposes of terrorism.
The 35-year-old was arrested in west London on suspicion of being a member of a proscribed organisation.
They were taken to a police station and released on bail until a date in mid-July.
Searches were carried out in addressed in north west, west and south west London, as well as in Essex.
At this time, there is not believed to be any imminent threat to the public, the Metropolitan Police said.
Commander Dominic Murphy, head of the Met’s Counter Terrorism Command, said: “Terrorism and terrorists have a global reach and impact and the activities of terrorist groups overseas can harm communities here in the UK as well as causing devastation to those abroad.
“Our investigation remains ongoing, but I hope that these arrests show we will take robust action against anyone here whom we suspect as being involved in terrorist activity regardless of whether their activity is focused here in the UK or elsewhere.”
Police say that enquiries continue.
