The killing of Iraqi civilians in the middle of heavy traffic at Baghdad's Nisoor Square last year sparked international condemnation and launched US congressional hearings into the matter.
Witnesses and an Iraqi investigation say the shooting was unprovoked, but Blackwater says the guards were defending themselves after being ambushed.
Victims have demanded compensation as well as punishment for the shooters.
The five men have been charged with 14 counts of manslaughter, 20 counts of attempted manslaughter and one count of using a machine gun to commit a violent crime.
A sixth Blackwater employee struck a deal with prosecutors, pleading guilty to killing one Iraqi and wounding a second.
Security contractors in Iraq have largely enjoyed blanket immunity from local authorities. A new law taking effect next year will revoke some of that immunity, although US forces and private guards working directly with them would still be protected.