Mr Reid was speaking to Muslims in Leytonstone, east London, when a man in the audience stood up and began berating him.
The Home Secretary watched as the protester was led from the building by police and stewards.
The man accused the Home Secretary of being an "enemy" of Islam.
A second protester was ejected a few minutes later after he also interrupted Mr Reid's speech.
He emerged from the venue clutching several posters, one of which said: "John Reid you will pay!"
Mr Reid was listing past terrorist attacks around the world, when the first protester began his barracking.
He said he was "very irate" and asked how Mr Reid could "dare" come to a Muslim area after so many Muslims - "over a thousand" - had been arrested.
"You are an enemy of Islam and Muslims," the protester shouted.
"Shame on all of us for sitting down and listening to him."
He shouted "state terrorism by British police".
"They are going to come in the morning to your house ... they are going to kick your door down when you're in bed with your wife, then drag you from your own bed," he shouted.
The first protester, Abu Izzadeen, brought a young boy with him into the meeting and said his aim was to disrupt John Reid's speech.
Shouting at the Home Secretary he said repeatedly: "How dare you come to a Muslim area when you have arrested so many Muslims in this area."
He went on: "I am furious I am absolutely furious - John Reid should not come to a Muslim area, we do not want to see him.
"John Reid, Tony Blair and George Bush's crusade can all go to hell."
Izzadeen, a well-known activist, accused the Government of state terrorism and said it was not far from the venue that two young men were wrongly arrested by police - an apparent reference to the controversial Forest Gate raid in June in which one man was shot and injured by police.
The protester, who refused to leave at first, was slowly ushered out by a number of police officers after about five minutes.
Mr Reid, who had not been able to carry on with his speech, said he understood that there were always members of the community who felt frustrated.
Izzadeen, trailed by a large group of cameras, photographers and reporters, held an impromptu press conference outside the cricket pavilion where the Home Secretary was giving his speech.
Mr Reid continued with his message, stressing that the terrorists were waging a "violent and indiscriminate war" and warned that communities needed to be more aware of signs of terrorist activity.
But Mr Reid had not got much further with his speech when the second protester held up placards saying "John Reid Go To Hell" and shouted: "Enemy of Islam and the Muslims."
Responding the first protester, Mr Reid said: "I was making the very simple point that however sensitive these issues are, we must never allow ourselves to be intimidated or shouted down.
"This is not a new experience for me or for those involved in politics.
"There will always be people who will not be prepared to take part in a dialogue, but who will try to intimidate and shout down.
"They are not confined to the Muslim community."
In his speech Mr Reid said it was vital that Muslims and the Western world were united.
He said terrorists were not Muslims "in the true sense of the word".
He went on: "They are militants who seek to achieve their aims through the forces of terror and violence.
"They cloak their language in the rhetoric of Islamic teachings, but they behave in ways that contradict the very principles of the Islamic faith.
"They believe that the West is evil and that all modern values are corrupting to Muslims, when in fact, it is they who are wicked and ruthless and they who are corrupting young Muslim minds."
Mr Reid said terrorist fanatics were on the hunt for young vulnerable minds to help their cause.
He said: "There is no nice way of saying this. These fanatics are looking to groom and brainwash children, including your children, for suicide bombings.
"Grooming them to kill themselves in order to murder others."
The Home Secretary said by protecting families the community would protect itself.
He said the reason he was speaking out today was because he did not think that the message that the Government and the country backed the Muslim community was understood.
He said: "I believe the message that this is a struggle against terrorism and intolerance and not Islam has become drowned out by the volume of accusations and counter accusations."
He urged all members of the community to join together to fight extremism.
Mr Reid was later attending a service to commemorate the British victims of terrorist attacks overseas.
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