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A group of 12 women were taken into custody during raids on five beauty salons early Sunday morning, North Aceh Police Chief Ahmad Untung Surianata told Antara.
The police chief said his men had shaved the women's hair off and given them men's clothes to wear, as part of their "coaching" to "become men."
"In addition, the officers also nurtured them by way of having them run for some time and telling them to chant loudly until their male voices came out," he said.
Surianata said the operation had been part of a campaign to prevent LGBT people from "adversely affecting" Indonesia's next generation. The women were taken to a police station for "further guidance," Antara said.
The police chief later told CNN that the operation began as a response to complaints that women in the salons had been offering free services at their salons to high school boys, as well as reports of drug use in the area. He denied that it was specifically an anti-LGBT operation.
"The North Aceh police should immediately and unconditionally release the 12 trans women and Indonesia's National Police Commission should start an investigation into the incident," he said.
Tunggal Pawestri, an Indonesian human rights activist, told CNN it was "crystal clear" police had violated the human rights of the transgender women in Sunday's raids.
"I also feel worry for the mental and health condition of the transgender people who were arrested," she said.
Aceh province, situated on Indonesia's northwestern tip, is the only part of the country ruled by Islamic Sharia law.
The raids and arrests are just the latest phase of a brutal crackdown on LGBT people in Indonesia in recent years, which has horrified activists.