The eight students of Khan Abdul Wali Khan University in Mardan in Khyber-Pakhtunkhwa were produced before the court which remanded them to police custody for four days.
Mashal Khan, a journalism student at the university, was stripped, beaten and shot in the head and chest by a violent mob on Thursday.
The video of the gruesome violence made via mobile phone cameras shows Khan's disrobed body - covered in blood - being dragged, first in a hallway and then on a road of the campus.
Prime Minister Sharif today issued a strongly-worded condemnation of the lynching of the student, saying the entire nation should be united in condemning this crime and to promote tolerance and rule of law in the society.
"The state will never tolerate those who take the law in their own hands," he warned.
Sharif said he had been left "deeply saddened" at the student's murder by the "insensitive mob".
He directed action against those found involved in the incident, ordering police to arrest all those who were responsible.
"Images of brutal killing of two brothers in Sialkot years ago still haunts & now #MashalKhan. Do we want to be known as benighted nation?" she added.
Speaking on the floor of the house, Khyber-Pakhtunkhwa Chief Minister Pervez Khattak condemned the killing as "barbaric" and "brutal". He announced an independent judicial inquiry into the incident.
"We have yet not found any blasphemous material in the case," he told the lawmakers.
PPP Chairman Bilawal Bhutto Zardari also expressed concern "over the cold-blooded murder of Mashal Khan" in a written statement issued by his party and demanded the immediate arrest of the culprits.
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