Explosive material was seized at an address in San Roque where a Turkish man was arrested. Two other men were held near Almuradiel.
They are thought to have been planning an attack in Spain or elsewhere in Europe, according to the Spanish Interior Minister Jorge Fernandez Diaz.
The arrests are part of one the biggest international operations to date against al-Qaeda, Mr Diaz said.
The material is currently being tested but is thought to be enough to "destroy a bus", he told reporters.
Mr Diaz also said one of the suspects was a senior al-Qaeda operative with extensive experience "in the manufacture of poison and car bombs".
One of the men put up "massive resistance" during the arrests, he added. None of them have been named.
Police found the explosives in a flat in the southern town of La Linea de Concepcion in Andalusia and arrested a Turkish national at the address.
