Jose Pimentel of Washington Heights in Manhattan faces terrorism related charges, including conspiring to build a bomb for terrorist purposes and possessing a bomb.
Pimentel, arrested by New York City police officers on Saturday from an apartment, is an "Al-Qaeda sympathiser who was plotting to bomb police patrol cars and also postal facilities, as well as target members of our Armed Forces returning from abroad" using pipe bombs, Mayor Michael Bloomberg said at a news conference.
"The suspect was a so-called lone wolf, motivated by his own resentment of the presence of American troops in Iraq and Afghanistan, as well as inspired by al-Qaeda propaganda. He was not part of a larger conspiracy emanating from abroad," Bloomberg said.
The terror suspect represents "exactly the kind of threat" authorities have warned about, as American military and intelligence agencies have eroded al-Qaeda's ability to launch large-scale attacks, the Mayor said.
Pimentel, an unemployed native of the Dominican Republican, is a US citizen. He was under police surveillance since 2009 and his extreme positions "made some of his like- minded friends nervous," Police Commissioner Ray Kelly said.
The commissioner said that Pimentel even talked about changing his name to Osama Hussein in honour of two of his deceased idols al-Qaeda leader Osama bin Laden and Iraqi dictator Saddam Hussein.
Kelly said the suspect was a follower of al-Qaeda leader Anwar al-Awlaki, the American-born cleric who was killed in a drone attack.
Last August, the suspect allegedly decided to carry out the bomb plot. He "jacked up his speed" after September 30, when al-Awlaki was killed in Yemen.
"We knew for the last two years, he's been reading a lot of jihadist information and talked a lot of inflammatory rhetoric," Kelly said.
"But it appears at this juncture the death of Anwar al-Awlaki motivated him and made him increase his tempo."
Bloomberg said the latest terror plot is the 14th that "lone wolves, al-Qaeda, or al-Qaeda affiliates," planned to carry out in the city since 9/11.
The case was reminiscent of another lone wolf plot in 2004 in which two New Yorkers angry over the treatment of prisoners in Iraq plotted to bomb a subway station.
"Because of such repeated threats, the NYPD remains focused on preventing another terrorist attack," he said.
Pimentel planned to test an explosive device in a mailbox before using it against other targets.
His aim was to show there were "mujahedeen" -- or Islamic militants -- in the city ready to wage "jihad."
He was arrested after he began to drill holes in the would-be pipe bomb, Kelly said.
While authorities had monitored him for over two years, they decided to move quickly for fear that device may explode, the commissioner said. "(He had) morphed from simply talking about such acts to actions -- namely, bomb making."
The suspect allegedly learned how to make a pipe bomb after reading Inspire, the al-Qaeda network's English-language online propaganda, recruiting and training magazine.
"His stated desire to attack our servicemen and women ... could have come from an al-Qeada playbook," Manhattan District Attorney Cyrus Vance said.