Police said their investigation at the east London house was continuing but declined to give details of the men who were arrested in the dawn raid or comment on reports that experts were scouring for evidence of unconventional weapons.
Several British newspapers quoted neighbours as saying the pair were devout British-born Muslim brothers of Bangladeshi origin, while ‘The Independent’ said the police suspect the wounded man has links to al-Qaeda.
Some of the 250 officers involved in the raid wore bio-chemical suits and carried gas masks.
Anti-terrorism officers worked closely with other agencies, including the Security Service and the Health Protection Agency to plan the raid.
The injured man, aged 23, was taken to the Royal London Hospital. His wounds were not life-threatening and he was later arrested on suspicion of being involved in plotting "acts of terrorism", police said.
Police said the second man, aged 20, was being held at a high-security police station in central London. He was also arrested under the Terrorism Act.
Peter Clarke, head of the London Metropolitan Police force's anti-terrorist branch, said the police acted on intelligence which "demanded an intensive investigation and response" and followed weeks of surveillance.
He said "We planned an operation that was designed to mitigate any threat to the public either from firearms or from any hazardous substances."
The Guardian newspaper, quoting anti-terrorism sources, said the raid was carried out because intelligence suggested that a viable chemical or biological weapon could be inside.
The Times reported that police suspected the house was a bomb-making factory and were looking for a "chemical vest" that a British suicide bomber was ready to deploy in a terror attack in London.