They found Thais and foreigners crowded inside the premises, where music was playing and food and alcoholic drinks being served.
A total of 109 party-goers were detained – 89 foreigners (38 men and 51 women) and 20 Thais (7 men and 13 women).
Also detained were Pongdaran Lim-ochakul, 40, who admitted being the owner, and Somsakul Kiartnarong, 47, who admitted being the organiser of the party, police said.
The customers were charged with violating the emergency degree to contain the spread of the coronavirus. Mr Pongdaran and Mr Somsakul were charged with colluding in operating an entertainment venue without permission. All were taken to Koh Phangan police station for legal action.
Pol Col Suraruek Phankosol, chief of Surat Thani immigration, said police had been alerted to tickets being sold online to a party at the Three Sixty Bar in breach of the law.
Surat Thani governor Wichawut Jinto said on Wednesday he had been briefed on the raid.
He had ordered strict action be taken against the offenders, to send the message that breaches of restrictions to contain the spread of the coronavirus disease would not be tolerated.
Photo credit @ Bangkok Post