Balvinder Singh, a member of the Babbar Khalsa group, was arrested from the Sikh-dominated northern state of Punjab on Monday, Police Commissioner KK Paul told a press conference in the Indian capital on Tuesday.
The second man - identified only as Jagannath - was picked up in New Delhi on Tuesday morning, the commissioner said, adding that police recovered a large cache of explosives and about 300,000 Indian rupees ($7000) in cash from his house.
They were apparently recruited in December 2004.
"Through interrogation, we know that the explosive devices were taken inside the hall in pieces and fabricated in the toilet" by Singh and his accomplices, Paul said.
The Delhi blasts killed two and
wounded 49 people on 22 May
"The plastic explosive was wrapped in plastic bags and smuggled inside in sports shoes," Paul said.
The two blasts took place in the cinemas during the screening of the film Jo Bole So Nihal, or Blessed is the One, on 22 May.
Police had initially thought Sikhs, upset about the title, which is used in prayer and battle, and scenes showing a Sikh police officer with scantily clad women, were responsible for the explosions.
But last week India's Defence Minister Pranab Mukherjee said the blasts were the "handiwork of terrorists".
Paul said the plan to plant explosives in the two theatres was hatched in the Thai capital of Bangkok.
The suspected bombers went to Bangkok soon after their recruitment and returned to New Delhi on 13 May, staying until 23 May, the commissioner said.
"The plastic explosive was wrapped in plastic bags and smuggled inside in sports shoes"
New Delhi Police Commissioner
The explosions stirred recollections of the spate of bombings that shook New Delhi during a guerrilla campaign for an independent Sikh homeland in the 1980s. The campaign waned in the early 1990s.
The Babbar Khalsa Sikh group continues to call for an independent state called Khalistan for the Sikhs.
The group was included on a US list of terror groups last year. In 2001 the British government had listed Babbar Khalsa under the provisions of the Terrorism Act 2000.