A police chief has hit out at the "blatant disregard" of what they suspect are dissident republicans after weapons were discovered.
Two men, aged 20 and 54, were arrested during the operation in Northland Road, Derry.
Detectives from PSNI serious crime branch said suspected firearms, ammunition and a suspected pipe bomb were seized.
The area was sealed off for a time on Friday night after police stopped two vehicles at around 8pm. Several homes were evacuated until Saturday morning as Army bomb experts made the area safe.
Chief Superintendent Stephen Cargin praised residents and the community for their patience during the operation.
"We have seen again the blatant disregard of those individuals willing to endanger life in our community. I have nothing but praise for the officers involved in the operation," he said.
"Police would ask that everyone in the community continue to work with us to take weapons off our streets and put those responsible behind bars."
The two men arrested at the scene are being questioned at the PSNI Antrim serious crime suite.
Investigators said other items, including a vehicle, were seized during follow-up searches at properties in the area.
Northland Road reopened and residents were allowed back to their homes at around 5.30am.