The three, aged 33, 41 and 47, have been taken to a London police station for questioning. One residential property in Surrey and two in Essex have been searched by the police and the SFO.
The three men are all British but were not named, and no further information has been released regarding their arrests.
Last week the Financial Service Authority proposed new rules for financial benchmarks following the Wheatley Libor Review. Wheatley was asked to carry out an independent review by the Treasury after Barclays was fined £290m in June for manipulating Libor.
However, there are still criticisms that the controls are not stringent enough.
Not enough is being done to prevent another LIBOR scandal," said Nigel Cannings of City compliance specialists Chase ITS.
"The arrest today of three people in connection with LIBOR fixing is the tip of the iceberg. But the stable door is still wide open."
"The evidence to stop this sort of behaviour in its tracks already exists in major financial institutions. Many telephone calls are recorded, and e-mail and Instant Message traffic is retained. All of these have been expensively replayed in major internal investigations (costing hundreds of millions of dollars), but little investment is going into pro-actively monitoring internal communication.”