A gunfight erupted after several revellers tried to flee the late-night bash held at an upscale resort near Khao Yai, a popular national park northeast of Bangkok.
A 24-year-old man wanted for drug trafficking was killed and one police officer was injured during a streetside shootout, said Rawat Klinkesorn, the commander of Thailand's Narcotics Suppression Bureau.
"Based on police intelligence we discovered they were holding a thank you party at this resort so we launched a raid," he told AFP.
Three suspects managed to flee but officers believe they were able to nab four of the major traffickers.
Officers also seized ten firearms, including machine guns, plus cash and cheques amounting to USD 2.5 million, said Rawat.
"Police are now questioning all the suspects," he said.
Nearly all of those arrested tested positive for drugs, mostly the meth pills known as "yaba" or "crazy medicine".
The cheap drug is chiefly produced in isolated laboratories in the Golden Triangle, a lawless border region where Myanmar, Laos and Thailand meet.
Thailand has harsh drug laws and after a decades-long "war" on narcotics its prisons are overflowing with offenders.
In an unexpected turnabout earlier this year, the kingdom's justice minister admitted Thailand had failed to stem the scourge and said he is pushing to see meth decriminalised.
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