Six men were taken into custody in Birmingham on suspicion of preparing or instigating an act of terror in the U.K. A woman was also arrested for failing to disclose information that may be relevant.
Although the plot was in its early stages and targets weren't immediately known, British security officials said the threat appeared significant.
All seven suspects are between 22 and 32 years old.
Police also were searching six domestic and one commercial property in Birmingham as part of the operation.
Europe has been the target of numerous terror plots by Islamist militants.
The deadliest was the 2004 Madrid train bombings, when shrapnel-filled bombs exploded, killing 191 people and wounding about 1,800.
In 2005, suicide bombers killed 52 commuters in London aboard three subway trains and a bus during rush hour.
The Associated Press contributed to this report.