Final answer:
Britain and Germany were the two nations engaged in a naval arms race, which was a significant factor contributing to the tensions leading up to World War I.
Step-by-step explanation:
The two nations that engaged in a significant naval arms race particularly in the lead-up to World War I were Britain and Germany. This was a period of intense competition to build powerful and technologically advanced navies. The naval rivalry was highlighted by the construction of the Dreadnought battleship, which became the standard for naval technology upon its launch in 1906. Germany sought to challenge Britain's long-standing naval dominance by embarking on its own battleship construction program. The tension created by this naval arms race was a factor in the rising animosities among the European powers, contributing to the outbreak of the war. The Battle of Jutland in 1916 was a notable surface clash between the British and German fleets during the war, with no decisive victory gained by either side.