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NSW and Federal Police swooped on five properties in the Sydney suburbs of Surry Hills, Lakemba, Wiley Park and Punchbowl on Saturday afternoon and found a 'considerable' amount of material.
But police won't say if they discovered an actual explosive device.
Police began investigating the case earlier this month after receiving reports from some parents that the trio of suspects had abused their children.
The accused, whose names are known to Daily Mail Australia but not yet confirmed by police, were arrested in the simultaneous raids.
Australian Federal Police, ASIO and NSW Police jointly carried out the operation on Saturday in Surry Hills, Lakemba, Wiley Park and Punchbowl.
One neighbour of a man arrested in Wiley Park told The Daily Telegraph the accused would nurture stray cats in the area.'He and his brother would feed about 15 cats and when we complained that they were bringing ticks and diseases into the block, they would walk off,' they said.
Relatives of two of the accused spoke out following the arrests, saying they 'love Australia'.
The four men arrested for their alleged role in the conspiracy can be detained for up to a week while investigators comb through evidence.