One of the students arrested was pepper sprayed during the protest at the college's Ocean Avenue campus, and a second was arrested on suspicion of assaulting a police officer, according to City College spokesman Peter Anning.
Anning said he does not yet know whether the arrests or pepper spraying involved City College campus police or San Francisco police, who are also on the scene assisting.
Around 15 to 20 students are currently inside the Conlan Building, an administrative building on the campus, and about as many remain outside, rallying in support, Anning said.
The students inside the building have indicated a desire to remain overnight, Anning said.
Police are on the scene both inside and outside the building and say they have no intention of kicking out the students.
The arrests occurred after a rally involving more than 100 students and faculty that called on the school's special trustee to resign and for the reversal of new policies that protestors said discriminate against undocumented and poor students.
Last July, the California Community Colleges Board of Governors installed Robert Agrella as special trustee and stripped the elected City College board of trustees of their powers.
The change came after the Accrediting Commission for Community and Junior Colleges announced it was revoking the school's accreditation effective this July, citing problems with its finances and governance structure.
A judge has issued an injunction delaying the decision from taking effect until lawsuits filed against the commission by the city attorney's office and the school's faculty union can be resolved.
Students at today's rally said that in an effort to appease the accrediting commission, Agrella and other school officials have made changes that adversely affect them, primarily the implementation of a new payment policy that requires students to pay fees in full or sign up for a payment plan before registering for classes.
Itzel Calvo, an ethnic studies student, said she was unable to register this semester because she is an undocumented immigrant who would have to pay out-of-state fees totaling about $3,000 to sign up for classes.
"There was no student input whatsoever," Calvo said of the new payment policy, which she said "keeps out students like myself from continuing their education."
She called on City College to "end the dictatorship" of Agrella, who has unilateral power over decisions on the school's rules and regulations.
Wendy Kaufmyn, an engineering instructor at the school, said Agrella has been "fostering the most negative relations between the college and its constituents that I can remember."
"We want our board back," Kaufmyn said. "They weren't perfect, but we elected them."
Iso Murillo, a women's studies and LGBT studies student, talked about taking a large course load this semester because of uncertainty over City College's future.
"I felt pressure to graduate before something bad happens to the school," Murillo said. "It's just been stressful, it's not been fun."
The students and faculty then marched to City College's administration building in protest over Agrella and his policies.
A separate rally was also planned this afternoon at the school's Chinatown/North Beach campus about City College's master plan for the next five years. Rally organizers say the plan has been rushed and does not have enough input from students, faculty and the community.
Another rally is also planned for 12:30 p.m. Friday in advance of a Board of Supervisors committee hearing on Supervisor David Campos' resolution, which is calling for the reinstatement of City College's board of trustees.
"We cannot continue to allow our open and transparent democratic process to be replaced by closed-door, unilateral decision making. Our community should be engaged in decisions regarding the college -- not a single administrator," Campos said in a statement.
College officials did not respond directly to the protests but Chancellor Arthur Tyler wrote a letter posted on the school's website last month responding to faculty concerns about Agrella and the new policy changes.
"In order for us as a college to remedy the things that are necessary to sustain our accreditation, we must work together and stop this divisiveness," Tyler wrote.