Officers were called at 09:30 GMT to reports a man was carrying "a suspected firearm" in Marchioness Way, in the Eaton Socon area of St Neots.
They recovered a firearm, which they believed to be an air rifle.
A man in his 20s from the St Neots area was arrested on suspicion of possessing an air-weapon in a public place.
He is being held at Thorpe Wood Police Station in Peterborough.
A man has been arrested after a search for a suspected gunman was launched in a Cambridgeshire town.