The 25-year-old was held in a counter-terrorism raid in Newport, south Wales, shortly after 7pm on Tuesday.
A spokesman for the Metropolitan Police said a building in the city was also being searched.
The 25-year-old was arrested on Tuesday night
Two other men, aged 18 and 21, are still in custody in connection with Friday’s bomb attack on a London Underground train at the southwest London station.
Commander Dean Haydon, head of the Counter Terrorism Command, said: “This continues to be a fast-moving investigation. A significant amount of activity has taken place since the attack on Friday.
“We now have three men in custody and searches are continuing at four addresses. Detectives are carrying out extensive inquiries to determine the full facts behind the attack.
“We anticipate that the searches will take some days to complete and may cause further disruption. However it is important that we continue with these searches and I’d like to thank all those affected for their support, patience and co-operation.”
Yahyah Farroukh was arrested in west London on Saturday evening
Detectives were earlier given more time to question the pair arrested over the weekend.
Yahyah Farroukh, 21, is listed as living at an address in Stanwell, Surrey, which was searched by officers on Sunday.
The 18-year-old man is suspected of planting the device, which exploded on a District line train shortly after it pulled into the station.
Farroukh is listed as living at an address in Stanwell which was searched by police
Magistrates have granted warrants allowing Farroukh to be held until Thursday, and the younger suspect until Saturday.
The news came as CCTV footage emerged which appears to show the Parsons Green bomb suspect on his way to plant his homemade device.
Thirty people were injured in the attack last Friday
The video shows a figure dressed in grey carrying a white supermarket carrier bag about 80 minutes before the blast.
Both Farroukh and the younger man are believed to have spent time in foster care with Penelope and Ronald Jones, who previously received MBEs for their services to children and families.
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