The five men, from Afghanistan, Pakistan and Iran, were arrested in Victoria, South Australia, Western Australia and New South Wales states.
The raids and arrests were part of Operation Delphinium, a year-long investigation involving more than 100 Australian Federal Police officers, the Australian Broadcasting Corp. reported.
Assistant Commissioner Steve Lancaster, the Australian Federal's national operations manager, told a news conference the men are "key players" in several major international people smuggling rings.
The men are suspected of being "actively involved" in recruiting and financing as many as 132 boatloads of people to Australia, Lancaster said.
They face fines as high as $10,000 and 10 years in jail if convicted of people smuggling and dealing in the proceeds of criminal activities, ABC reported.
The men, mostly in their 30s, appeared in court in several states soon after being arrested.
The arrests brought the number of alleged people smuggling organizers charged by police since 2009 to 26, Lancaster said.
Lancaster also said AFP had received around 200 tips from communities and more arrests are likely.
"There are two clear messages here," Lancaster said.
"It will impact on those that are involved in those syndicates, no doubt, and [the arrests] will guarantee there will be further arrests made. From a deterrence perspective, this isn't the end.
"If you are a significant people smuggling organizer, you likely are known to us," he said.
The arrests come in the run-up to a federal election Sept. 7 in which political parties have tussled over what to do with ever-increasing numbers of illegal boat people arriving in Australian territorial waters.
Prime Minister Kevin Rudd is hoping to retain power despite opinion polls showing his Labor Party slipping in popularity behind the main opposition Coalition group led by the National Liberal Party.
Rudd's Labor party has done deals with Papua New Guinea and the Micronesian island republic of Nauru to allow construction of refugee detention centers to house Australia's asylum seekers arriving by boat.
The government also has had talks with the Indonesian government to have Indonesian police and maritime patrols come down harder on people-smuggling activities. Many of the smugglers' boats set off from Indonesia, bound for Australia's Christmas Island in the Indian Ocean.
Australia's treatment of 46 detained asylum seekers was the focus of a damning report published last week by the United Nations Human Rights Committee.
The report said Australia must release the 46 detainees, who have been held for more than four years, and compensate them for their time in detention.
The U.N. report also found Australia guilty of nearly 150 violations of international law over the indefinite detention of the 46, The Age newspaper reported last week.
The federal government should provide the 46 asylum seekers with rehabilitation and compensation, the report concluded.