The 10 men arrested after a yearlong investigation are suspected of belonging to a network involved in funding the Islamist terror organization Islamic Jihad Union, German press agency DPA reported. The group is believed linked to Al Qaida.
Eight arrests took place in France, one in the Netherlands and one in Germany.
In Germany, prosecutors said the man arrested in Weil am Rhein in the country's southwest was a 35-year-old of foreign nationality and that he was not wanted by local authorities.
The man is a Turkish immigrant, radio station Südwestrundfunk reported.
Following a request from French authorities anti-terror police raided his flat at 6 am, arrested him and seized unspecified objects, prosecutors told AFP.
He was due to appear before a judge later on Friday or by Saturday at the latest who will rule whether he will remain in custody. A higher regional court in Karlsruhe will then decide on his extradition to France.
In France, a source close to the case told news agency Agence France-Presse that eight suspects of Turkish origin thought to have ties to Al-Qaeda were arrested in a suburb of the eastern city of Mulhouse - around 50 kilometres (30 miles) from Weil am Rhein - and in the central Rhone region.
The source said anti-terrorism units moved in on the group as a "pre-emptive" measure and that none of the suspects had committed attacks.
The group "is linked to the Pakistani-Afghan" area, the source added.
The French domestic DST intelligence agency had been investigating the ring for close to a year, and the arrests were ordered by anti-terrorism judge Thierry Fragnoli.
Police were still searching the suspects' homes on Friday.
In the Netherlands the state prosecutor's office said that the man arrested was a 48-year-old Turk in the southern town of Tilburg.
The arrest followed a request from French authorities who have applied for him to be extradited to France, a statement said.
"The French police and intelligence services have over these past months launched a probe into the funding of a Turkish Islamist group" linked to Metin Kaplan, who was sentenced to life in June 2005 for plotting to overthrow Turkey's secular system, the statement said.
The statement said three apartments had been searched during a raid.