Watkins, 48, was serving a 29-year jail term for multiple sexual offences, including serious crimes against young children and babies at HMP Wakefield, in West Yorkshire.
He was attacked in prison with a knife earlier this month, sources confirmed.
The two men, aged 23 and 39, have been arrested on suspicion of conspiracy to murder and are in police custody.
Last week, Rashid Gedel, 25, and Samuel Dodsworth, 43, were charged with murder in relation to the incident.
Detective Chief Inspector James Entwistle of the Homicide and Major Enquiry Team said: “Extensive enquiries remain ongoing in relation to the murder of Ian Watkins and these arrests form part of that.
“Ian Watkins’ family are being updated as the investigation progresses. However, we do not anticipate any immediate developments at this stage.”
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