The apparent mutiny, involving 12-20 soldiers, took place early in the morning in Port Moresby, reports said.
The group have placed the defence chief under arrest.
The incident is linked to the conflict between Peter O’Neill and Sir Michael Somare – the two men claiming the role of prime minister.
They have been wrangling over the role for six months.
The Australian government has released a statement saying it is ”very concerned” and ”monitoring developments closely”.
”We want a PNG which is politically stable and economically successful,” said the statement from Prime Minister Julia Gillard’s office. ”The military has no place in PNG politics.”
”It is critical therefore that this situation be resolved peacefully as soon as possible, with the PNG Defence Force chain of command restored.”