Police identified one of the suspects as Datu Amir Bahar Hushin Kiram, who is thought to be a key player in the Feb. 9 invasion of Lahad Datu in Sabah state, on the eastern tip of the island of Borneo.
Malaysian police said they are questioning Amir Bahar, in his late 40's and a nephew of Sultan Jamalul Kiram, under the Security Offenses Special Measures Act. The sultan lives in Manila in the Philippines.
Amir and has his wife were arrested near the coastal town of Semporna around 1 a.m. Saturday, The Star newspaper in Malaysia reported.
Police said the arrest of Amir Bahar and that of a local Malaysian coordinator, Datu Amir Khan and his wife, Friday night, has crushed the so-called Royal Sulu Royal Army whose leader Azzimudie Kiram.
Azzimudie is thought to have fled to the Philippines March 11, leaving 200 followers behind.
"The local coordinator has been identified as the individual who made arrangements for food and drinks, accommodation, transportation and medicine for the terrorists since the early part of the intrusion," Malaysian Police Deputy Chief Khalid Abu Bakas said.
"With the capture of the commander and a local stooge of the terrorists, I am confident the terrorist group is now crippled."
Police also said they arrested 416 people in connection with the armed raid by the ardent followers of Sultan Jamalul Kiram III, the Filipino claimant to the Sultanate of Sulu which includes eastern Borneo.
Sulu is a Filipino island province in the Autonomous Region in Muslim Mindanao, off the coast of Borneo.
Sabah became part of Malaysia when the British colonial administration gave independence to what were its Federated and Unfederated Malay States in 1963.
Successive hereditary sultanates of Sulu, in the Philippines, have argued it was illegal of the British to hand over part the Sulu area of the island of Borneo to what became Malaysia.
Karim has remained defiant throughout the latest incursion by his followers.
Fighting between members of Kiram's royal army and Malaysian forces triggered a "Kiram Spring," The Philippine Star newspaper n the Philippines quoted a sultanate spokesman earlier this month.
"This is the Sultanate Jamalul Kiram Spring. We are doing this in the name of the Filipino people," spokesman Abraham Idjirani, said.
He also said the sultanate's army is being supported by Filipinos in Sabah who experience repression under strict Malaysian rule.
However, Idjirani denied reports the Moro National Liberation Front -- a rebel group fighting for independence of the Philippines island of Mindanao -- is helping the sultan's army led by Agbimmudin Kiram.
Agbimmudin, also known as Azzimudie Kiram, is the Sultan's younger brother and wanted by Malaysian police in connection with the raids.