Dozens of people were at the rave on Saturday night at the abandoned Argos shop on Sandringham Road.
Residents reported that sound and music from the unlicensed event could be heard from two streets away, according to the Metropolitan Police.
The event was still going on at 8am the following day, with the all-night party prompting three reports to Hackney Council and two calls to police.
The police arrived at around 11:40am and 20 people were asked to leave the property, though it is expected that approximately 100 people were in attendance overall.
They seized equipment under Section 63 of the Criminal Justice and Public Order Act - which gives officers the power to remove people attending or preparing for a rave, and to seize sound equipment.
A man wanted by Westminster Magistrates Court after failing to appear in court in relation to an offensive weapon offence was also arrested.
Three stolen bikes and a suspected stolen Blue Badge were also recovered.
Inspector Dave Lamb said: “We recognise that several persons at this venue are protected by ‘Squatters Rights’ – those persons remain at the venue lawfully and were not part of the group asked to leave attending the unlicensed music event.
“They remain at this venue.
“Whilst on scene, residents approached our officers and personally thanked them for the response we provided.”