The arrests on Wednesday follow intense fighting in recent weeks in the strategic northern town of Nasir between national forces and the White Army militia, a loosely-organised group mostly comprising armed Nuer, Machar's ethnic group.
The White Army fought alongside Machar's forces in the 2013-2018 civil war that pitted them against predominantly ethnic Dinka troops loyal to President Salva Kiir.
Petroleum Minister Puot Kang Chol, who hails from Nasir, and the deputy head of the army Gabriel Doup Lam were arrested, while all other senior military officials allied with Machar were placed under house arrest, said Machar's spokesperson, Puok Both Baluang.
"As of now, there's not any reason provided to us that led to the arrest or the detention of (these) officials," Baluang told Reuters.
South Sudanese troops were also deployed around Machar's residence, although he had been able to travel to his office on Wednesday morning, Baluang said.
In the government's first comments since the arrests, Information Minister Michael Makuei accused forces loyal to Machar of collaborating with the White Army and attacking a military garrison near Nasir town on Tuesday.
Makuei did not comment on the detentions, but said Kiir had vowed that the country would not go back to war.
"The government is in the process of addressing this situation and people should not panic or listen to unfounded and unrealistic wild rumours that are being spread by enemies of peace and stability," Makuei said in a statement.
South Sudan's civil war, which erupted just two years after the country gained independence from Sudan, killed an estimated 400,000 people, drove 2.5 million from their homes and left almost half the nation's 11 million citizens struggling to find enough food.
A peace deal struck in 2018 has mostly avoided outright fighting between Kiir and Machar's forces, though localised violence routinely flares up.
Daniel Akech Thiong, senior analyst on South Sudan at the International Crisis Group, said the oil-rich country appeared to be on the brink of war, fuelled by increased access to weapons due to the conflict in neighbouring Sudan.
"The fragile peace that has maintained a delicate balance among competing armed leaders since 2018 is at risk of collapsing," he said.
The war in Sudan has also disrupted South Sudan's oil exports, which represented 90 per cent of its foreign exchange earnings.
