Coastguards discovered the 2,626 rare turtles - 1,180 Asian yellow pond turtles and 1,446 yellow-lined box turtles - in a container on board a vessel in Kaohsiung, a port in the south of Taiwan, on Saturday.
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They arrested a man surnamed Cheng but declined to provide more details because they are chasing the masterminds of the smuggling ring.
The animals were to be eaten by rich Chinese or used as an ingredient there in traditional medicine, officials said, adding it was the biggest seizure in Taiwan of protected turtles.
"After consuming up their own turtles, now they are turning their eyes to Southeast Asia and Taiwan," Lin Kuo-chang, an official in charge of conservation affairs at Taiwan's Council of Agriculture, said.
Because the number of wild turtles is on a sharp decline in China, market prices have surged to about five times those of Taiwan, which is separated by a 200-kilometre (124-mile) strait from the Chinese mainland.
"Since the turtles are not seen often in the wild, many people must have been involved in the illegal catching," said Wu Sheng-hai, a life science professor at National Chung Hsing University in Taipei.
The two types of turtles are on Taiwan's second of the three-category wildlife protection list, meaning they are deemed rare and valuable.
The first category is for endangered specie<