The members of the Lashkar-e-Taiba (LeT) group were planning to strike around the Christmas and New Year festivities, Indian police said. Indian authorities blame the group for a raid by gunmen in Mumbai in 2008 that killed 166 people and raised tensions with nuclear-armed neighbour Pakistan.
"It is going to be a violent attack which will cause disruptions," Himanshu Roy, joint commissioner of Mumbai Police told a news conference, releasing the sketch of one of the four suspected militants.
"They have recently arrived in Mumbai. We are not in a position to reveal their nationalities now but they are LeT members," he said.
Another attack like the 2008 raid on Mumbai could seriously damage India's economy, which has so far proved resilient to militant strikes, Indian officials have said.
An attack originating from Pakistani soil could force a swift Indian response, destabilising regional security.
The four men were named as Abdul Karim Musa, Noor Abul Elahi, Walid Jinnah and Mehfooz Alam.
Earlier this month, a bomb in a Hindu temple town killed a child and injured several people. In February, a powerful blast ripped through a restaurant in the western city of Pune, killing 17 people, the first major attack since Mumbai.
Such attacks have fed fears India may never be able to completely secure its cities from attacks by extremists from Pakistan as well as radical Hindu groups
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