Chittagong Metropolitan Police (CMP) arrested Mohammad Alam, 32, a listed terrorist, from city's Ambagan area under Khulshi Thana early this morning.
Later the arrestee confessed as he had a Light Gun and one bullet that hidden in his rented house in the said area.
According to his confession, Detective Branch (DB) police recovered the firearms, DB sources said.
Alam is said a notorious gangster in city's crime world.
At least four criminal cases including a murder case have been pending against him with Khulshi and Pahartali police stations.