The lawsuit, filed in a federal court in Washington on Wednesday, demands the release of 23-year-old Ahmad Abu Ali and his return to the United States.
Their lawyer said it marked the first time a lawsuit had been filed on behalf of a US citizen detained in a third country at the US government's request.
It named Attorney-General John Ashcroft, FBI Director Robert Mueller, FBI agents who questioned Abu Ali, Homeland Security Secretary Tom Ridge and Secretary of State Colin Powell.
Abu Ali has been under investigation by US authorities in the "Virginia jihad" case in which a number of defendants have been convicted.
FBI agents searched the parents' home in Falls Church, Virginia, in June 2003 as part of the investigation.
The lawsuit claimed Abu Ali had been held indefinitely and interrogated at a Saudi Arabian prison, at the US government's direction, in violation of his constitutional rights.
The suit alleges Saudi security is
holding the Arab-American man
It said he may have been subjected to abusive treatment.
According to the lawsuit, Abu Ali, who was born in Houston, graduated in 1999 as valedictorian of his high school class in Virginia.
When he was arrested in June last year, Abu Ali - who holds dual US and Jordanian citizenship - was a student at a Saudi university.
The lawsuit claimed US authorities had directed Saudi officials to assist them in detaining and interrogating Abu Ali "in an attempt to gather information regarding the prosecution of suspected terrorists and to prevent potential acts of terrorism".
Other claims include allegations that FBI agents, while questioning him in September in Saudi Arabia, had threatened to designate him an "enemy combatant" and send him to the US military base at Guantanamo Bay in Cuba if he did not cooperate.
A Justice Department spokesman declined to comment on the lawsuit.
Morton Sklar, executive director of the nonprofit group World Organisation for Human Rights USA, represented the family in the lawsuit.