The three men - aged 33, 41 and 47 - have been taken to a London police station for interview.
The Serious Fraud Office has issued search warrants for three properties in the South East of England - one in Surrey and two in Essex.
All three men are British nationals living in the UK, a statement said.
One of the men is said to be a banker, with the other two having worked for an inter-dealer broker.
In July, the SFO said it had formally launched a criminal investigation into the rigging of inter-bank lending rates.
These are the first arrests since the US Commodity Futures Trading Commission began looking into Libor fixing it suspects took place in the Autumn of 2008.
As well as dozens of individuals, a number of major banks are also being investigated by regulatory authorities in the UK and the US over attempts to manipulate the rate, one of the most important in the UK economy.
Bought in in the 1960s, the daily Libor rate is calculated from banks' estimates of how much it costs them to borrow from other banks, and is used as the basis for some retail bank and mortgage rates.
Since then, until the credit crisis at least, it has been used as the benchmark essentially used to judge just about any financial product based on cash deposits and lending.
In June, Barclays bank was fined Â£290m for attempting to manipulate the rate.
A report written by the Financial Services Authority's managing director Martin Wheatley in September said the Libor system was broken and in need of a complete overhaul, including criminal prosecutions for those who try to manipulate it.
Mr Wheatley said bankers guilty of fixing Libor in the future could be jailed.
Three men have been arrested in connection with continuing investigations into the manipulation of the Libor inter-bank lending rate.