Specialist officers raided two properties in Burngreave, one in Shirebrook Road, Meersbrook, and another in Stocksbridge this morning, while a fifth was carried out in Chesterfield.
Three men, aged 22, 36 and 41, were arrested in Sheffield and a 31-year-old man was arrested in Chesterfield as part of a pre-planned counter terrorism operation.
Residents described hearing a 'huge bang' as specialist officers raided two properties in Burngreave at 5,30am this morning.
Police have not confirmed the specific locations of the raids but the Fatima Community Centre in Brunswick Road was cordoned off this afternoon. A second property in nearby Verdon Street was also reportedly raided.
A member of public said they had heard the two men arrested had been sharing a rented flat together but this has not yet been confirmed by police.
Residents described the area as 'multicultural' and said it was now key that people from different backgrounds stick together amid fears that the raids could cause race relations to boil over.
One woman, who only wanted to give her name as Zahran and lives near the centre, said: “There was a huge bang, I've never heard anything as loud. It was really terrifying.
“There must have been about 30 officers there. It was shocking, we did not know what to do. We did not know if we would be safe. But we are glad police have acted.”
She added that the centre has only been open for about two years and added there has “never been any problems” from the site.
The 22-year-old added: “I have lived here all my life. There are a lot of families who have lived here a long time and everyone seems to get along fine.
“I hope people stay united. There will always be a bad few people, and it should not divide the majority.”
Pauline Payne, who has lived in the area for 20 years, added: “When things like this happen it always makes people a bit suspicious and divided. But people have to guard against that.
“The area gets bad coverage but people generally mix well together. We need to make sure that continues."
Another man, of Brunswick Road, said: “There was a huge bang, I jumped straight out of bed to see what was happening. It's all very worrying. I would never have expected it.”
All four men were arrested on suspicion of being concerned in the commission, preparation or instigation of acts of terrorism under section 41 of the Terrorism Act 2000.
They have been taken to a police station in West Yorkshire for questioning.
A spokesman for the North East Counter Terrorism Policing Unit, which led the operation, said the raids were 'intelligence led' and 'pre-planned'.
The Royal Logistics Bomb Disposal Team are understood to have carried out a controlled explosion during the raid in Chesterfield.
National news outlets have described the raids as an 'Islamist terrorist bomb plot' but the North East Counter Terrorism Policing Unit said they are not 'commenting on speculation regarding attack planning.'