Police and national park rangers have rounded up 170 refugees of five nationalities, including Rohingya Muslims, on Koh Tarutao in Satun.
They were allegedly planning to illegally enter Australia.
A team of police and Tarutao National Park rangers found the refugees in five large makeshift shelters in a secluded part of the island on Saturday night.
Marine police inspector Pol Lt Col Chaipol Yaiying said the detainees, who are thought to have come to the island from Malaysia, comprised 110 men, 12 women and 48 children.
They are Bangladeshi, Myanmar, Malaysian, Indonesian and Pakistani nationals, with an undetermined number of Rohingya among them. None had travel documents.
They were brought to the mainland to be questioned by Satun police who charged all the refugees, apart from the Rohingya, with illegal entry.
The Rohingya will be placed in detention centres and sent to a third country later, Pol Lt Col Chaipol said.
Police believe the migrants were taken to Tarutao through an arrangement with two brokers; a Thai named Hayi Hussain and a Malaysian known as Yusup. Both are still at large.
The migrants were to be put on a boat heading for Australia later.
While on the island, the migrants were guarded by three armed Thai men who fled before the authorities' raid began.
Pol Lt Col Chaipol said the migrants have been placed in facilities run by the Immigration Police Bureau, the Public Health Ministry and the Social Development and Human Security Ministry.
Before they were charged, the migrants were interviewed to see if they had been trafficked. Pol Lt Col Chaipol said most of the migrants wanted to work in Australia, where they could earn higher wages than at home.
Others said they merely wanted to holiday in Australia, the police inspector said.
The crackdown was in response to an alert issued by the Australian police about the migration racket.
Areeyuhas, 40, one of the captured migrants from Myanmar, said he had worked in Malaysia for 10 years and was promised a much better-paid job in Australia by the brokers.
He said he was also taking his family with him.
The family paid the brokers about 60,000 baht for the trip.
Areeyuhas said he and his family arrived on Tarutao on Friday via a speedboat from Malaysia.
He said the boat ride was provided by a group of people he did not know.
The family was told they would stay on the island while they awaited their onward journey to Australia.
However, Surapon Kongchantuk, a human rights lawyer, said these people were clearly trafficking victims.
"Some past cases have had authorities' involvement," he said.
"It is time the government seriously rooted out officials who benefit from trafficking."
Mr Surapong also said the Rohingya should not be prosecuted as illegal immigrants.
"They are victims and should be taken care of by the government while solutions to their plight are worked on," he said.