Most of the 20,904 documents seized were fake passports that not yet been completed, Lieutenant General Chatchawal Suksomjit, commander of Immigration police told AFP.
But 2,300 of them were completely faked versions of passports from France, Suriname, Norway, Belgium, Italy and Myanmar, he said.
The suspects arrested included seven people from Myanmar and an Indonesian. The nationalities of the others was not immediately certain, Chatchawal said.
Passport fraud is a common problem in Thailand, but it is rare for police to seize more than a few hundred fakes in a bust.
"This is the largest arrest of a passport counterfeiting gang," Chatchawal told AFP.
The gang is accused of providing false documents to clients in South Asia and Africa, he said.
The leader of the gang is a Myanmar man who claimed to be a Thai and who is also accused of drugs trafficking and smuggling weapons to Sri Lanka's Tamil Tiger rebels, Chatchawal said.
All 12 have been charged with falsifying o