The arrests came during raids Wednesday on four camps in the Bogia district of Madang province, the Australian Broadcasting Corp. reported.
Police said 12 of the 29 arrested are the suspected murderers, but all of those arrested allegedly cannibalized the victims.
Provincial police commander Anthony Wagambie Jr. said members of the group said they believed their victims were witches.
"They were looking at going out and looking for sorcerers, suspected people who do sorcery in the area," Wagambie said. "So they started getting together and said they will go out and get rid of the sorcerers. They said they were led there by spirits but then they've gone a step further and started killing people and decided to eat their body parts."
Police said the group members will be charged with willful murder and cannibalism, and that more raids will be carried out to capture other members of the group.