The students are accused of hacking to death Ahmed Rajib Haider, 35, near his home in Dhaka in February last year, days after he helped launch a campaign against Islamist leaders accused of war crimes.
Police also charged an imam from a Dhaka mosque with instigating the murder by allegedly preaching that it was legal to kill atheist bloggers who campaigned against Islam.
"They killed him for his blasphemous writings against Islam and the Prophet Mohammed," Dhaka police deputy commissioner Masudur Rahman told AFP.
The body of Haider, better known by his Bengali online identity Thaba Baba, was found with hatchet wounds to the head in what police said was an apparent attempt to behead him.
Six out of the seven men -- all of whom are students of the prestigious and private North South University -- and the imam have been arrested and are being held in jail, Rahman said.
After Haider's death, Bangladesh's Islamic parties started to protest against other campaigning bloggers, calling a series of nationwide strikes to demand their execution, accusing them of blasphemy.
The secular government of Prime Minister Sheikh Hasina reacted by arresting four bloggers including the "militant atheist" who was allegedly attacked by the same group of students accused of the murder.
The government also blocked about a dozen websites and blogs to stem the furor over blasphemy, as well as stepping up security for the bloggers.
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