Noah Clare and 16-year-old Amber Lynn Clare were found "safe and sound," the Tennessee Bureau of Investigation tweeted, adding that Jake Clare, 35, was in custody. The tweet included a photo of young Noah playing in the sand.
Details of how the children and suspect were found were not immediately released.
Earlier this week, investigators asked for the public's help in finding the victims after they were allegedly taken by the boy's father.
The California Highway Patrol Tuesday issued an endangered missing advisory for Noah and his cousin, Amber, after the suspect vehicle was found in San Clemente.
Noah Clare and Amber Lynn Clare were taken by Jacob Clare in Gallatin, Tennessee Nov. 6, according to CHP.
The suspect vehicle was also spotted in Arizona. Tennessee officials issued an Endangered Child Alert for Noah on Nov. 9 and elevated it to an Amber Alert on Tuesday.
Orange County Sheriff Don Barnes is expected to provide more details about the case at a Thursday afternoon press conference.
The Associated Press contributed to this report.