The founder of the website at the centre of an FBI-led investigation into online piracy barricaded himself with what appeared to be a shortened shotgun during the raid, police say.
Kim Dotcom, also known as Kim Schmitz, and three others were arrested in police raids in Auckland on Friday.
Who is Kim Dotcom?
The 37-year-old is a German national with New Zealand residency.
The FBI probe resulted in one of the world's largest file-sharing websites, www.megaupload.com, being shut down on Friday morning.
Read yesterday's story about Kim Schmitz's dramatic arrest
Detective Inspector Grant Wormald says when police arrived at the mansion in Coatsville in two marked police helicopters, Dotcom retreated into the house despite police clearly identifying themselves.
He activated several electronic locking mechanisms inside the house, called the Dotcom Mansion, Det Insp Wormald said.
"While police neutralised these locks he then further barricaded himself into a safe room within the house which officers had to cut their way into.
"Once they gained entry into this room they found Mr Dotcom near a firearm which had the appearance of a shortened shotgun."
Making the arrest was "definitely not as simple as knocking at the front door", he said.
Raid disrupts tycoon's birthday plans
Police continued to search the Dotcom Mansion on Friday night, Det Insp Wormald said.
On Friday police executed 10 search warrants at houses and businesses across Auckland, seizing more than $10 million from financial institutions, and assets, including luxury cars worth $6 million and expensive art works.
Three of the men facing charges for alleged copyright infringement and money laundering on a massive scale were arrested at the Dotcom Mansion.
The fourth was arrested at a nearby property.
The other men are Megaupload's chief marketing officer Finn Batato, 38, chief technical officer and co-founder Mathias Ortmann, 40, all of Germany, and Dutch national Bram van der Kolk, 29, who is also a New Zealand resident.
They were denied bail when they appeared in North Shore District Court on Friday and remanded in custody to reappear on Monday.
The men face extradition to the United States.
More than 20 search warrants were executed in the US and eight other countries on Friday. Another three people were also arrested.
NZN