Amnesty International accused the Vietnamese government of using national security as a pretext to silence cyber-dissidents and stifle freedom of expression on the Internet.
In a new report, the human rights group said the crackdown was the result of the communist regime's concern over use of the Internet by political dissidents to circulate opinion.
"In Vietnam, pushing the 'send' button can result in dire consequences including years in prison and family and friends put under 24-hour surveillance," Amnesty said Wednesday.
The 34-page report by the London-based organization coincided with Wednesday's one-day annual human rights talks in Hanoi between the European Union and Vietnam.
Since 2001 at least 10 people critical of government policies have been arrested for exchanging e-mails with overseas Vietnamese, posting articles critical of the government on the Internet and expressing dissenting opinions.
Six of these cyber-dissidents have been sentenced to long prison sentences after unfair trials, Amnesty said. Others are awaiting trial.
"These arrests attest to a sense of paranoia among the leadership of the government who feel under threat and fear a 'peaceful evolution' which could threaten the current supremacy of the Communist Party of Vietnam," it said.
Vietnamese foreign ministry spokesman Le Dung, however, dismissed the "biased and erroneous" report, saying only people who violated the law were punished.
Hanoi maintains tight control and surveillance over the Internet, to which around 2.5 million people out of a population of 80 million have access, mainly through Internet cafes.
Websites critical of the authoritarian, one-party system are firewalled, while Internet cafe owners have also been instructed to prevent their customers from accessing "subversive and poisonous" material.
Amnesty called for the immediate and unconditional release of all "prisoners of conscience detained solely for peaceful expression of their opinions".
The organization highlighted the case of two nephews and a niece of imprisoned Catholic priest Father Thadeus Nguyen Van Ly, a lifelong critic of Vietnam's religious rights record.
Nguyen Vu Viet, Nguyen Truc Cuong and their sister Nguyen Thi Hoa were jailed in September for three to five years for emailing information about their uncle and the religious situation in the country to US-based activists.
Amnesty says their appeal trial is due to take place on Thursday.
In December last year, Nguyen Khac Toan, a 48-year-old former soldier and businessman, was also jailed for 12 years on espionage charges for passing information to overseas Vietnamese groups about protests by farmers in Hanoi.
And in June this year 35-year-old businessman Pham Hong Son was handed a 13-year sentence after he posted an article about democracy on the Internet. It was reduced to five years on appeal following an international outcry.
Amnesty also pointed to the paradox between the government's desire to harness the Internet for socio-economic growth and its censorship activities.
"The Vietnamese government appears unwilling to recognize that the Internet can only be a tool for development and prosperity if the right to freedom of expression and information is respected fully in both law and practice."