He is believed to have been involved in activities linked to Islamist extremism
The 31-year-old was detained at a business address in south London just after 5pm on Tuesday.
He was detained under the Terrorism Act on suspicion of "being involved in the commission, preparation or instigation of acts of terrorism."
The suspect was taken to a central London police station and remains in custody.
Armed officers were present when the arrest was made. No shots were fired.
Meanwhile, police are searching a residential address in south London.
A Metropolitan Police spokesman said: "The arrest is being linked to extremist Islamist terrorism."
It comes at a time of unprecedented activity by counter-terrorism units around the UK.
Police are conducting hundreds of investigations and have been making almost one arrest a day.
Home Office figures released earlier this month revealed there were 315 terrorism-related arrests in the year ending September 2015.
That was an increase of more than a third on the previous year and was the highest tally for a year to September on record.
The data also showed the number of women and girls being detained more than doubled compared to 2013-14.