He cited growing extremism, increasing lawlessness and an 'interfering judiciary' as some of the reasons behind his extraordinary step.
Crackdown
Musharraf, who is also chief of the army staff, issued a provisional constitutional order declaring emergency.
Justice Chaudhry and eight other judges of the supreme court refused to endorse the provisional constitutional order issued by the president, but Musharraf's government rejected the ruling.
Chaudhry, on being replaced, has been placed under house arrest.
Private Geo TV said the president of the supreme court bar association has been arrested. There have been several other arrests across the country.
Several Pakistani television channels earlier reported the move to impose emergency, before being taken off the air.
Witnesses said paramilitary troops had been deployed at state-run television and radio stations.
Curbs have been imposed on the media and cable TVs taken off the air.
Nawaz Sharif, a former prime minister who is currently in exile in Saudi Arabia, said Pakistan was heading towards anarchy and described Musharraf's decision to invoke emergency as worse than martial law.
Speaking to Al Jazeera from Jeddah, Sharif said the imposition of emergency was unprecedented and that it was done by Musharraf to pre-empt a possible adverse supreme court ruling on his eligibility to be re-elected as president.
The ruling was expected in a matter of days.
"The country is in the hands now of one single man who has no respect for its fate," said Sharif.
"He has no repsect for the constitution, he has no respect for the judiciary, he has no repsect for the law of the land. He is doing this to perpetuate his rule - I would say mis-rule."
Benazir Bhutto, another prime minister, has returned to the country from Dubai where she had gone to visit her family.
"She left Dubai and I spoke to her on the phone and she said the plane was taxiing at Karachi airport," Wajid Shamsul Hassan, an aide to the leader of the Pakistan Peoples' Party (PPP) said.
'Black Day'
Kamal Hyder, reporting for Al Jazeera from Islamabad, said the imposition of emergency rule would dismay Pakistanis.
"There will be a sense of gloom tonight across Pakistan. People will not be happy because they were looking forward to a smooth transition towards democracy," he said.
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Government cites increasing violence as a
reason for imposing emergency |
"Instead what they will see is more draconian measures from a government which is losing support among ordinary people and the legal fraternity."
Amjad Malik, member of the Supreme Court Bar association, told Al Jazeera that the imposition of emergency showed Musharraf's desperation to hold on to power.
"I think this shows how General Musharraf is willing to extend his rule. Since the military coup [in 1999] he has tried to intimidate the judiciary.
"He has now resorted to emergency which will mean human rights will be suspended and there will be further attempts to intimidate the judiciary. I think it is another black day for Pakistan."
The development comes amid increasing violence across Pakistan by pro-Taliban and al-Qaeda-linked fighters and growing political uncertainty over Musharraf's continued rule.
Large sections of Pakistani society, including lawyers, are opposed to Musharraf's rule and want him to step down.
His recent re-election has also been challenged in the supreme court.
Emergency rule could lead to the postponement of national elections, which are scheduled to take place in January.
Condoleezza Rice, the US secretary of state, called Musharraf's decision to declare a state of emergency "very regrettable".
David Miliband, the British foreign secretary, also expressed grave concerns over the developments in Pakistan.
"It is vital that the governance acts in accordance with the constitution and abides by the commitment to hold free and fair elections on schedule," he said.