Police are questioning two men on suspicion of terrorism offences after more than 100 homes were evacuated.
Residents have been allowed to return home today after the alarm was raised following raids at two properties in Cheltenham on Friday, police said.
Officers initially searched a property in Brooklyn Road, Hester's Way, where they arrested a 52-year-old local man under the Explosive Substances Act.
Police then found items “requiring further investigation” in a garage in Buttermere Close, in the Up Hatherley area of the town.
A 31-year-old man was subsequently arrested and both men remain in police custody, Gloucestershire Constabulary confirmed.
The force's Assistant Chief Constable Richard Berry said he was grateful to people for their support and patience during a “thorough and methodical” investigation.
A rest centre was set up for residents evacuated from their homes in St Margaret's Hall.
Care staff from NHS Gloucestershire were on duty to provide information and advice on medication and health concerns.
Police confirmed they had rearrested two men who had initially been detained on Thursday evening.
A spokesman said: “The two men arrested in Cheltenham yesterday have both been further arrested on suspicion of the commission, instigation or preparation of a terrorist act (contrary to the Terrorism Act 2000).
“This relates to examination of the items found in a garage in Buttermere Close in the Up Hatherley area of Cheltenham.
“The South East Counter Terrorism Unit has assumed responsibility for the ongoing investigation but will continue to work closely with Gloucestershire Police.
“The 52-year-old man and 31-year-old-man are both from Cheltenham. They remain in police custody at this time.”