Detectives arrested a 29-year-old man in Kenthurst and a 24-year-old man in Castle Hill, in northwest Sydney, on Wednesday morning.
They remain at a local police station where they were taken for questioning.
The arrests came about 11 days after three men stormed Chris Baghsarian's northern Sydney home and bundled him into a car in the middle of the night.
Remains believed to be those of the 85-year-old grandfather were found on Sydney's northwest outskirts on Tuesday.
Police believe the intended target for the abduction was a relative of underworld-linked Sydney businessman Dimitri Stepanyan, who lived on the same street in North Ryde.
Flowers were laid at the front door and near the patio of Mr Baghsarian's home on Wednesday morning.
His family, who described the harrowing ordeal of the kidnapping as a "nightmare", expressed relief the alleged offenders had been caught.
"We welcome the news of the recent arrests in relation to the kidnapping of our father and grandfather", they said in a brief statement on Wednesday.
But they asked for privacy, as they come to grips with the death of their devoted father, brother, uncle, and grandfather "who would never hurt a fly".
The recklessness the kidnappers showed in both taking the wrong man and targeting a family member angered authorities.
Police repeatedly told the kidnappers they had the wrong person and publicly urged them to release the elderly man, who relied on daily medication.
Several of those public appeals occurred after the evening of February 14, when police believe his attackers disposed of his body at Pitt Town.
Detectives found the remains near a golf club in Pitt Town, a semi-rural area on Sydney's northern outskirts, after members of the public reported seeing a vehicle linked to the investigation in the area a day after Mr Baghsarian disappeared.
Officers searched a vacant home in Dural on Thursday and Friday after identifying it as a makeshift stronghold for the kidnappers.
Detectives are yet to formally identify the body but suspect it is the octogenarian because of the forensic links to the Dural site, which police previously searched.
NSW Premier Chris Minns described the grandfather's ordeal as "a shocking violent crime" and said the criminals responsible will be met with a swift response.
"(They) will not get away with it," he told reporters on Wednesday.
Asked last week about organised criminal groups targeting relatives of their rivals, Detective Acting Superintendent Brad Abdy labelled the practice "ridiculously disgusting".
He was speaking to media about an investigation into the shooting of former Canterbury and Wests Tigers winger Matt Utai outside his home in Greenacre, in southwest Sydney, as he was about to drive to work.
The 2004 NRL premiership star was caught in the crossfire of his son Iziah Utai's alleged criminal associations and escalating gang conflict, detectives believe.
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