A police spokesman said one man was found in the palace in an area that is open to the public at about 10.30 p.m. on Monday. He had scaled a fence to gain entry to the palace grounds.
He was arrested for burglary, trespassing, and criminal damage, while a second man was arrested outside the palace on suspicion of conspiracy to commit burglary. Both men were released on bail.
The Guardian reports: "It is believed that the intruder entered one of the 19 state rooms after scaling a 12ft fence and kicking down a poorly secured external door.
The break-in will embarrass police whose focus on royal security was said to have been increased following the birth of Prince George in July."
"No members of the royal family were at Buckingham Palace at the time of the incident," a police spokesman said. "A review of the specific circumstances of this incident is being carried out."
Buckingham Palace had no comment to make on the incident, saying it was a matter for the police.
Various parts of the 775-room building are usually open to the public during the summer, including the State Rooms, the Queen's Gallery, the Royal Mews, and the Rose Garden, reports the Associated Press.
Queen Elizabeth usually spends August and September in Scotland at Balmoral Castle.
It is not the first time intruders have broken into Buckingham Palace.
The most famous security breach was in 1982, when Michael Fagan scaled a palace drainpipe and broke into the queen's bedroom where she was sleeping. He reportedly sat on the bed and chatted to the monarch for 10 minutes before he was arrested.
In an interview last year withThe Independent on Sunday Fagan said that his visit to the Queen's bedroom was actually his second time breaking into the palace. During the first break in, he wandered around looking in various rooms, and eventually left without being caught.
"I was loving it... It was like Goldilocks and the Three Bears; I tried one throne and was like 'this one's too soft'. I was having a laugh to myself because there was one right next to it, so I tried another. He demonstrates how he reclined on a chair to view the Queen's art, putting his feet up on the pub table: "I was sitting like this – see. I liked the picture and thought I'd look at it till someone comes, but nobody came," he told The Independent on Sunday.
(Editing by Mike Collett-White)