Firearms officers raided two homes in Elizabeth Grove and Bourne Street, in Dudley, as part of a 'blitz' on gun crime.
The weapon had been broken down and is believed to have been illegally imported from the Czech Republic – but it was taken off the streets in the raids on Tuesday.
A West Midlands Police spokesman said: "Three men in their 20s were arrested – one on suspicion of importation of a firearm, and two on suspicion of witness intimidation.
"They are all also under arrest on suspicion of possession of a firearm with intent to cause fear of violence."
While the gun was originally designed to fire blanks, it is capable of being converted into firing live rounds.
The raids follow an incident in August this year when a vehicle was rammed by a car on Watsons Green Road, in Dudley.
One of the people in the car then pointed a gun at the victims before driving off but no one was injured.
More than 114 firearms have been recovered by West Midlands Police so far this year.
Anyone with information that could help West Midlands Police's fight against gun crime are asked to call contact 101 or Crimestoppers on 0800 555 111.