The owner of the restaurant in Tsuruoka city, who is also the chef, had no license to serve blowfish and was being questioned on suspicion of professional negligence, police official Yoshihito Iwase said.
Blowfish, while extremely poisonous if not prepared properly, is considered a delicacy in Japan and is consumed by thrill-seeking gourmets.
Iwase said the seven men ordered sashimi and grilled blowfish testicles at the restaurant Monday night.
Shortly after, they developed limb paralysis and breathing trouble and started to lose consciousness - typical signs of blowfish poisoning - and were rushed to a hospital for treatment, Iwase said.
A 68-year-old diner remained hospitalized in critical condition with respiratory failure and two others, aged 55 and 69, were in serious condition, he said.
"It's scary. If you go to a decent-looking restaurant that serves fugu, you would assume a cook has a proper fugu license," Iwase said, using the Japanese term for blowfish.
Blowfish poison, called tetrodotoxin, is nearly 100 times more poisonous than potassium cyanide, according to the Ishikawa Health Service Association. It can cause death within an hour and a half after consumption.
Three people died and 44 others were sickened by blowfish poisoning in 2007 - most of them after catching the fish and cooking it at home - according to the Health Ministry.
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