More than 11,000 police and soldiers, backed up by tanks and armored vehicles, stormed the Tocoron prison in the country's north on Wednesday.
The facility had long served as the headquarters of the Tren de Aragua gang that operates in Venezuela and other Latin American countries.
Interior and Justice Minister Remigio Ceballos told reporters four prison guards were arrested as suspected accomplices of gang members who had lived it up behind bars.
"There will be no impunity. We will go against all the criminals and accomplices," said Ceballos, hailing a "successful operation that allowed us to strike a blow against criminal groups."
After declaring it had taken control of the prison, the government began evacuating its 1,600 inmates to other locations.
The prison boasted gang-installed amenities such as a zoo, a pool, gambling rooms, a disco, a baseball field and a restaurant.
Some inmates had lived there with their wives or girlfriends, who were kicked out during the operation.
Ceballos said sniper rifles, explosives, rocket launchers, and grenades were seized and authorities showed journalists buckets of bullets, heaps of machine gun ammunition belts and machines used to mine for the cryptocurrency Bitcoin.
On Wednesday, the government said some inmates had managed to flee during the clampdown, without giving details.
Ceballos said the gang leaders had mistreated other prisoners and kept them in "a kind of slavery."
Tren de Aragua, Venezuela's most powerful home-grown gang, is involved in crime countrywide and has spread its tentacles to neighboring nations.
According to an investigation by Venezuelan journalist Ronna Risquez, it has some 5,000 members.
The gang emerged a decade ago, and is involved in kidnappings, robberies, drug trafficking, prostitution, extortion and illegal gold mining.
The InSight Crime think tank says the gang is also a major player in migrant smuggling.
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