Soldiers captured more than 500 mortar rounds in the raid
The find, described as "significant, included weapons and other munitions, and three people were detained.
In Baghdad, violence has continued unabated with several people killed in bombings, while a mortar attack on a school left at least three girls dead.
Security is being stepped in the shrine city of Karbala for Ashura, a major religious festival for Shia Muslims.
500 mortar rounds
A British military spokesman said Sunday's early morning raid by some 250 troops was hastily arranged after they received information that ammunition was being moved in Az Zubayr, an area to the south-west of Basra.
The haul included 500 mortar rounds, 11 rockets, suspected bomb-making equipment, weapons and ammunition.
It is not the biggest find British troops have made in southern Iraq.
However, with mortar and rocket fire, as well as roadside bombs, posing a regular threat to UK and Iraqi forces, the spokesman said it was hoped the raid had disrupted potential attacks.