Police spokeswoman Katarzyna Padlo said police believe it was stolen between 3:30 a.m. and 5 a.m. Friday morning, when museum guards noticed that it was missing and alerted police.
Padlo also said that the iron sign, which spanned a gate at the main entrance to the former Nazi death camp in southern Poland, was removed by being unscrewed on one side and pulled off on the other.
We have arrested five men aged from 20 to 39 in the north of Poland," said Krakow police spokesman Dariusz Nowak.
"They were picked up shortly before midnight and the sign was found in a house," he added without giving further details.
The wrought-iron sign was half-unscrewed, half-torn off from above the death camp's gate between 0330 and 0500 on Friday.
Investigators say at least two people would have been needed to steal the 5-m (16-ft), 40-kg (90-lb) sign.
Auschwitz museum spokesman Jaroslaw Mensfelt said the thieves had apparently carried the sign 300m (yards) to an opening in a concrete wall. The opening was left intentionally to preserve a poplar tree dating back to the time of World War II.
Four metal bars that had blocked the opening had been cut and footprints in the snow led from the wall opening to the nearby road, where police presume the sign was loaded on to a vehicle.
More than a million people - 90% of them Jews - were murdered by the Nazis at Auschwitz during World War II.
Pawel Sawicki, a spokesman for Auschwitz museum, said the recovery of the sign was an "enormous relief".
"We are extremely grateful to the police who have done fantastic work," he told AFP news agency.
"This symbol, probably one of the most important of the past century, can be put back in its place."
The museum is preparing to celebrate the 65th anniversary of Auschwitz-Birkenau's liberation by Soviet troops on 27 January.
Source JPost and BBC