The men had been involved in a protest rally last month |
The men belong to the Hindu Rights Action Force (Hindraf), which organised a mass rally last month alleging discrimination against ethnic Indians.
Analysts say the arrests are likely to stoke more racial tension.
The five men are being held under the Internal Security Act (ISA), which human rights groups want to abolish.
The act is not thought to have been used against government critics since 2001.
Ethnic Indians - mainly Hindus - form one of Malaysia's largest minority groups.
Activists say that many Hindus live in poverty, partly because of policies granting jobs and economic advantages to the ethnic Malay Muslim majority.
But the government rejects claims of unfair discrimination.
'Indefensible'
The five detained activists were involved in a peaceful rally last month - the biggest protest involving ethnic Indians in more than a decade.
Police used tear gas and batons to break up the protest.
Deputy Internal Security Minister Johari Baharom said the five men had been arrested because their actions threatened national security.
"They can be held for two years for sedition and also for carrying out activities that threaten national security," he told the state Bernama news agency.
The ISA provides for a two-year detention, which can be extended further at the government's discretion.
Opposition leader Lim Kit Siang condemned the government's move, telling the French news agency AFP that the use of the ISA against the men was "completely indefensible".
Earlier this week Prime Minister Abdullah Badawi said the government would not tolerate street demonstrations, and warned that if necessary he would resort to using the ISA "without feeling guilty, without feeling sad".
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