The officers were on the lookout for stolen cars in East Walthamstow when they stumbled across what they have described as a pirate DVD factory.
Forty DVD towers, used to duplicate DVDs, and label printers were found on Sunday - as well as 115 cannabis plants at an adjoining unit.
Five men and two women were arrested and are being questioned by police.
'Incredible discovery'
The premises also contained bedding and a kitchen area, leading police to describe the premises as capable of 24-hour production of pirate DVDs.
Officers from the London Regional Assets Recovery Team (RART), Federation Against Copyright Theft (FACT), trading standards and the Metropolitan Police's film piracy unit have been at the scene.
Det Ch Insp Tristram Hicks, head of RART, described it as an "incredible discovery".
FACT boss Raymond Leinster said it was the third major pirate operation dismantled in greater London since February.
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