The victims were male Muslim relatives returning from a funeral in a truck, the driver of the vehicle told police in Pattani, one of three southernmost provinces plagued by a long-running insurgency.
"Army rangers saw a pick-up truck and asked it to stop. They heard a gunshot and assumed they were being fired on, so they pounded the truck with gunfire, killing four men and injuring five others," said a police report on the incident on Sunday evening.
A 70-year-old and an 18-year-old man were among the dead, while five men and boys were also hurt including three teenagers, aged 14, 15 and 19, and a 76-year-old.
Two guns were found in the truck, although the report did not reveal whether either had been fired. Police said the driver told officers that the weapons did not belong to anyone on the truck.
"We will have to investigate this incident carefully and I will interview both the rangers and survivors to ensure justice to both sides," said Police Colonel Chonnawee Chamareuk, Nongjik district police chief.
Thailand's three southernmost provinces of Pattani, Yala and Narathiwat, near the border with Malaysia, have been riven by a complex insurgency, waged without clear aims.
There is a heavy presence of government troops, supported by armed paramilitaries.
According to the latest figures from Deep South Watch, which closely monitors the southern conflict, almost 5,000 people -- both Buddhists and Muslims -- have been killed and 8,300 wounded since the unrest began in 2004.
People in the region complain of a long history of discrimination against ethnic Malay Muslims by authorities in the Buddhist-majority nation, including alleged abuses by the armed forces.