A police spokesman said five men were arrested for "breaching the peace".
The protesters waved placards saying "Wen Jiabao, Tibetan blood on your hands".
"We want China to free our people from a brutal regime. China has imprisoned and killed thousands. We call on Wen Jiabao to hold direct talks with the Dalai Lama," Tse Ring, a charity worker and one of the protesters, said, referring to the Tibetan spiritual leader.
Matt Whitticase, another activist with Free Tibet, said: "We also want to send a message to Gordon Brown [the British prime minister]. Brown must get tough with Premier Wen.
|A smaller, friendlier crowd also gathered to greet Wen on his visit [Reuters]
"He must demonstrate his belief in human rights and [that] freedom is universal, even when it is politically inconvenient."
Brown will meet Wen several times during his three-day visit to Britain, and Free Tibet campaigners have planned demonstrations to coincide with Wen's schedule.
Wen was also greeted at the embassy by a small, pro-China crowd who were celebrating Chinese New Year and waving Chinese flags.
One Chinese-born student, identified only as Jin, dismissed the pro-Tibet protest.
"I think they have been influenced by propaganda. I don't see how they can really know what is going on in Tibet," he was reported by the AFP news agency as saying.
Relations between China and Europe have been strained over human rights in Tibet and the Dalai Lama, who Beijing regards as a separatist for wanting Tibetan autonomy.
Human rights issues
"I think that most of the Western countries will continue to flag up all these [human rights] issues and China is very much alive to these issues," Andrew Leung, a China analyst, told Al Jazeera.
"The concerns about human rights, the inequalities and [fears about] transparency are not only applicable to China, but to many countries around the world."
Tibet was rocked by violent anti-Chinese protests in March last year, which China blamed on the Dalai Lama.
Rights groups allege that hundreds of protesters remain in jail and are subjected to harsh treatment and even torture.