The arrested men were identified as Birendra Tamang, Nima Sherpa, Bhani Nath, Sun Bahadur Pariyar and Santosh Majhi.
They are members of the underground group Samyukta Jatiya Mukti Morcha, which had claimed responsibility for the blast at Babarmahal in the centre of Kathmandu.
They were arrested from Kapan, Bauddha and Balaju areas on the outskirt of Kathmandu. Police found explosive materials and detonators in their possession, officials said.
Depraj Lama alias Bishwokranti, the chief of Samyukta Jatiya Mukti Morcha and the mastermind behind the blast, is currently in jail awaiting the final verdict in his case. He was arrested in June last year.