Television video showed the children being held by Phoenix police. The children appeared to be fine.
The children were dropped off at a house in south Phoenix. CBS Phoenix affiliate KPHO reports they were reunited with their mother at police headquarters.
Police are still searching for the suspects. They are described as four black males.
Early Tuesday, police say a group of armed men forcibly entered a home and took the children, a boy age 2 and a girl age 11-months.
Police Sgt. Andy Hill said a witness heard the men yelling they were the police.
Police believe the children were taken away in a white Honda or Toyota with dark, tinted windows.
A Silverado pickup was also in the area parked in the alley near 27th Avenue and Indian School Road.
Police do not think the mother of the children knew the suspects.
The suspects remain at large.