The ammunition, found several weeks ago by other officers, is believed to be from the force's own supplies.
The officer is from the unit protecting the Royal Household but does not guard any individual Royal Family member.
He is being questioned on suspicion of misconduct in public office and unlawful possession of ammunition.
He is in custody at a London police station and will be suspended from duty.
Investigators have been searching the officer's home address and the police building where the ammunition was found.
The Royal household is aware of the ongoing investigation and the Independent Police Complaints Commission has been informed, police said.
Assistant commissioner Mark Rowley announced last week that the Metropolitan Police was reorganising its Protection Command to improve operational efficiency.
A Royal Protection officer has been arrested over ammunition found in personal lockers in Buckingham Palace's grounds, the Metropolitan Police said.