A man in his 40s was arrested.
The discovery was made when officers stopped a van in the south inner-city.
The incident occurred this evening between 730-8pm on the Kylemore Road in Ballyfermot, Dublin when the ERU stopped a auto.
The seizure is being reported as a significant development in the fight against feud-related violence in the capital.
A Garda emergency response unit swooped after a tip-off from the organised crime unit and the drugs squad.
The men were travelling in a van at the time, from which Gardaí recovered a loaded handgun.
The man is being detained at an undisclosed garda station on Dublin's northside under the Criminal Justice (Terrorist Offences) Act.