China views democratically governed Taiwan as its own territory and has ramped up pressure on Taipei since President Lai Ching-te took office in May, a man Beijing accuses of being a "separatist".
The squid fishing boat was near the Taiwan-administered Kinmen islands, which sit next to the Chinese cities of Xiamen and Quanzhou, but in Chinese waters on Tuesday night when it was boarded and seized by two Chinese maritime administration boats, Taiwan's coastguard said.
The Taiwanese boat was operating during China's no-fishing period, the coastguard said, adding Taiwan will communicate with China and urged them to release the fishermen as soon as possible.
China's Taiwan Affairs Office did not immediately respond to a request for comment.
Taiwan sent its own coastguard ships to assist and broadcast warnings asking China to release the fishing boat, but China's ships broadcast back saying not to interfere, Taiwan's coastguard said.
Taiwan's ships then backed off to avoid a conflict and the Taiwanese fishing vessel was then taken to a Chinese port, it added, saying three of the five fishermen were Indonesian migrant workers.
Taiwan Coast Guard Administration Deputy Director-General Hsieh Ching-chin told reporters in Taipei that China should explain why it had seized the boat.
Hsieh pointed out that in previous cases, fishermen had been released after paying fines when operating during China's no-fishing season.
Taiwanese fishing boats need to raise their alert level and the coastguard will also strengthen its patrols, he added.
"The coastguard also calls on the mainland side not to use political factors to handle this situation," Hsieh said.
This is not the first time a Taiwan fishing boat has taken by Chinese authorities after operating in that country's waters, an official said, speaking on condition of anonymity.
A Taiwan official, who's familiar with the island's security planning, told Reuters they have issued alerts to fishing and transport authorities around Taiwan to pay attention to "possible risks" amid frequent Chinese coastguard activities in the region, including near Japan and the Philippines.
It is not uncommon for Taiwan and China to detain each other's trespassing fishing boats. So far this year Taiwan has detained five such boats from China, Taiwan coastguard data shows.
Chinese maritime enforcement and coastguard ships have been regularly operating around Kinmen since February after two Chinese fishermen died trying to flee Taiwan's coastguard.
