The men had led a peaceful pro-independence celebration attended by 5,000 Papuans on October 19.
Papuans, mostly indigenous Melanesians, have long accused Indonesia's military of violating human rights in the region and complain that the bulk of earnings from its rich natural resources flow to Jakarta.
"All five defendants are found guilty to have committed treason as stated in the criminal code. All aspects have been proven legally and convincingly," Judge Jack L. Oktovianus told the Jayapura district court.
"We sentence them all to three years in prison." The maximum sentence for treason is life in prison, but prosecutors had sought a five-year prison term.
At least three people were killed and more than 90 injured during the pro-independence celebration.
Local TV footage showed paramilitary police shooting into the crowd and beating participants with batons and bare fists after the men declared independence and raised the outlawed Papuan flag.
Eight police officers involved in the shooting were let off with a warning. Among the defendants was Forkorus Yaboisembut, president of the Papuans' self-proclaimed state.
In 1969, Indonesia took control of Papua, a former Dutch colony on the western half of New Guinea island, after a vote among a select group of Papuans widely seen as a sham. Jakarta keeps a tight grip on Papua, with the military regularly clashing with locals.