Police said they were held under the Terrorism Act on suspicion of being involved in the commission, preparation or instigation of an act of terrorism.
Officers are searching an area around Talbot Way, Birmingham and a number of properties have been evacuated as a precaution.
Some road closures were also put in place and army bomb disposal experts are at the scene.
The men are being held after the remains of a small explosive device were found near the Aisha Mosque in Walsall on June 22.
They were also arrested in relation to a suspected nail bomb found last week in Tipton.
Police said the first man was arrested after being spotted by officers working in the local area and the second was detained at a property nearby.
The discovery of the device in Walsall led to an evacuation of more than 100 people from their homes.
Residents reported hearing a loud bang but no one was injured and it caused minimal damage.
A local man found the remains of the exploded device in an alley adjoining the mosque and took them home to show his wife.
The mosque's imam also took them home later before anyone realised their significance and raised the alarm.
Police previously said they were treating the incident as a hate crime.
The suspected nail bomb blast in Tipton , just eight miles from Walsall, took place on July 12 outside the Kanz Ul Iman Masjid mosque.
Bomb experts carried out a controlled explosion on part of the device, which officers said was designed to cause "serious harm".
Residents had earlier reported hearing a loud bang in wasteland off Binfield Street, Tipton, that scattered nails and other debris over a large area and into local gardens.
No-one was injured in the explosion but some minor damage to property was reported.
Source
Yahoo News
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