Police have searched an address in Ramsbottom where they discovered what they believed to be a small homemade explosive device.
Three people have been arrested on suspicion of manufacturing explosive devices and are currently in custody.
Police said that they were two men, aged 26 and 27, and an 18-year-old woman.
Officers attended the property on William Street in Stubbins to carry out a pre-planned warrant this morning and the Explosives Ordnance Department attended.
A number of nearby properties were evacuated as a precaution and a number of roads were closed, with diversions put in place. The cordon has now been lifted.
Rest centres were set up at the Rostron Arms pub at Edenfield and Haslingden Sports Centre on Helmshore Road.
Superintendent Stasia Osiowy said: "We have now lifted the cordon and people can return to their homes, although a scene remains in place at the address while we continue our enquiries.
"I would like to thank the community for their co-operation and support. I recognise the disruption incidents like this can cause but I hope that people appreciate we are acting with their safety as our first priority."
Enquiries are currently ongoing.
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