The arrests late on Friday and early Saturday were not linked to the alleged plot to bomb transatlantic airliners or to the July 2005 bomb attacks on London's transport network.
The raids followed months of surveillance and investigation, the capital's Metropolitan Police said.
In a separate operation, police in the northwest of England arrested two men under the UK's Terrorism Act in Manchester at 6am (0500 GMT) on Saturday.
Police said the arrests were not connected to those in London.
The 14 people in London were arrested on suspicion of the commission, preparation or instigation of acts of terrorism.
Twelve of the men were arrested in a Chinese halal restaurant, The Bridge to China Town, in the Borough area of south London.
Of the other two arrests, one was in east London and the other was not specified.
Madi Blyani, the owner of the Chinese restaurant, said that he had been surprised by the arrival of a large number of police officers.
Blyani said: "It was surprising actually, because plenty of them suddenly came in all together. There were more than 50 or 60 of them.
"They suddenly came inside because they were suspicious of some of the customers and they talked to them.
"They talked to them more than one hour, two hours. And they arrested some of them."
A Metropolitan Police spokesman said a search was being carried out in East Sussex, southeast of London, in connection with the arrests.
The location is believed to be Marks Cross, near Crowborough.
The police said officers were continuing to search an unspecified number of homes around the capital.
Peter Clarke, head of Metropolitan Police anti-terror efforts, said police and intelligence agents were now attempting to track thousands of people believed to be directly or indirectly involved in terrorism, according to comments made public on Friday.