A Taliban spokesman confirmed that the kidnapped security men had been released under "certain conditions". He, however, gave no other details.
The Taliban fighters blew up the police office and captured the policemen after a day-long fight, Dilawar Khan, a regional police commander, said.
Four paramilitary and police officers were wounded in the clashes around the police station, a Pakistani intelligence official said.
The capture of the policemen came amid continuing clashes between government forces and pro-Taliban tribal fighters in the Swat Valley.
The violence has forced thousands of people living in the troubled region to flee their homes.
The Pakistani government has carried out a series of military operations against Taliban-linked fighters in the region in recent months.
Many of the fighters are loyal to Maulana Fazlullah, a religious leader who since mid-2007 has led an armed campaign aimed at promoting Sharia.
Kamal Hyder, Al Jazeera's correspondent in Islamabad, said that scores of public buildings in Swat Valley have been destroyed amid the fighting.
"At least 200 institutions, such as schools, have been destroyed. The government continues to insist that it is Fazlullah's loyalists who have been doing this. The militants themselves say this is not the case," he said.
"The whole infrastructure in Swat is destroyed, the administration is nowhere and education systems have totally collapsed."
Pakistan Institute for Peace Studies
While visiting the Swat Valley, Hyder found evidence that the conflict is widening from the upper reaches of the valley to other areas.
"The failure of a political settlement has led to a more intense military confrontation here. People here will tell you that the military solution alone will not work," he said
"The provincial government that rules the Northwest Frontier Province [which contains the Swat Valley] has failed totally.
"From what we have seen, the problem has spread from upper Swat and is spreading to lower Swat. What happens next is anybody's guess."
Amir Rana, director of the Pakistan Institute for Peace Studies, said that the Pakistani government does not appear to have a clear long-term strategy in bringing Swat under control.
"Even if the government is successful, what happens next? The whole infrastructure in Swat is destroyed, the administration is nowhere and education systems have totally collapsed," he told Al Jazeera.
"The biggest challenge comes after the elimination of the Taliban ... But the Taliban are intensifying their operations. They are confident."
About 50 tribal fighters were killed in military operations across the valley between Monday and Tuesday, security and intelligence officials have said.