Coastguard officials said captain Lee Joon-Seok and two of his crew were taken into police custody in the early hours of the morning.
The Yonhap news agency said Lee faced five charges, ranging from criminal negligence to violation of maritime law.
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Twenty-nine people have been confirmed dead in the disaster, but 273 are still missing.
The coastguard revised the figures slightly overnight, citing counting errors.
As the arrests were being made, dive teams who had spent two days vainly battling powerful currents and near zero visibility, finally penetrated the lower decks of the 6,825-tonne Sewol.
Briefing distraught relatives of the missing, the deputy director of the national coastguard Choi Sang-Hwan said divers had reached a lower deck passenger area around 5:50am (2150 GMT Friday).
"Through a window, they glimpsed what appeared to be bodies, but were unable to break through with the tools they had to hand," Choi said.
He stressed that visibility was extremely poor and the divers had been unable to confirm precisely what they saw before they had to return to the surface.
Nets would be placed around the submerged ferry to prevent any bodies drifting away during the eventual recovery process, Choi said, while adding that the rescue teams had not given up hope of finding survivors trapped in air pockets.
The hundreds of relatives camped out in a gymnasium in Jindo island -most of the them parents of high school students -have sharply criticised the pace of the rescue operation, accusing officials of incompetence and indifference.
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