Following a pre-planned operation, the 20-year-old was arrested under Section 41 of the Terrorism Act (2000) on suspicion of being involved in the commission, preparation, or instigation of an act of terrorism, police said.
The arrest, which was carried out by detectives from Counter Terrorism Policing South East (CTPSE), took place at around 5am at a residential address in Worthing.
Officers have set up a cordon in Congreve Road, Worthing, and neighbours in the area have reported receiving leaflets from CTPSE asking them if they have seen anything suspicious. Police have not confirmed the address of the operation.
The man currently remains in police custody.
As part of the investigation, officers are also carrying out a search at the address.
The arrest was intelligence-led and linked to Islamist-related terrorism, police said.
Detective Chief Superintendent Kath Barnes, head of CTPSE, said: “This arrest forms part of a pre-planned operation by CTPSE, working alongside colleagues at Sussex Police.
“I would like to thank the local community for their patience while we carry out searches and continue our investigation.”
Chief Inspector Sarah Leadbeatter, District Commander for Adur, Worthing and Horsham, said: “Sussex Police are working closely with the Counter-Terrorism investigators to support their operation which is intelligence-led and not in response to any specific threat to our local area.”
Members of the public can report any suspicious activity in their area to police in confidence at gov.uk/ACT.