Mostly expatriates, the suspects denied they were attending a gay marriage in the Aziziya district on Monday and said they took part in a ceremony to mark the wedding of a Chadian friend.
Gay marriages are illegal in Saudi Arabia and investigators say that that invitations to last Wednesday's ceremony indicated it was a gay function.
Police also pointed to the suspicious behavior of guests, who fled the venue at the sight of police cars - some even leaving their vehicles behind.
Police raided a rest house where the ceremony was under way after a tip-off from the Commission for the Promotion of Virtue and Prevention of Vice.
One of the two Chadians involved told police that he was "rehearsing for his legal marriage" which was due to take place two days later.
His Saudi sponsor confirmed the man’s story saying he had given him some money to meet the marriage expenses.
But the incident sent shock waves through Saudi society when it was first reported on Friday by al-Jazira Arabic newspaper.