The National Anti-Terrorism Unit conducted a raid against a neo-Nazi group, arresting 20 ultra-nationalists, police said on Tuesday.
Those detained were allegedly part of the Hammerskin Nation, a skinhead group founded in 1988 and based out of Dallas, Texas in the US.
"In our country they seek, among other things, to expel and prevent the entry of all ethnic minorities to Portugal," prosecutors said.
The searches, which took place across the country, were conducted as part of an investigation into hate crimes which took place between 2013 and 2015.
The crimes include robbery, religious and sexual discrimination, and at least one attempted murder, the Lisbon District Prosecutors office said in a statement.
Some of those arrested were suspected of being involved in an attack on a group of anti-fascist communist activists in 2015 following an anti-immigration rally in Lisbon.
The police operation against neo-Nazi gangs was the largest since 2007 when 30 ultra nationalists were arrested along their leader Mario Machado.
Attacks on refugees and immigrants are rare in Portugal, western Europe's poorest country. The nation has large minority communities rooted in its African ex-colonies along with Brazil and India.
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