Saudi Arabia, Egypt, Bahrain, the United Arab Emirates and Yemen have cut diplomatic ties with Qatar, accusing it of destabilising the region, the BBC reported on Monday.
They say Qatar backs militant groups including so-called ISIS and al-Qaeda, which Qatar has denied.
The Saudi state news agency SPA said Riyadh had closed its borders, severing land, sea and air contact with the tiny peninsula of Qatar.
Qatar called the move "unjustified" with "no basis in fact".
The unprecedented move is being seen as a significant split between powerful Gulf countries, who are also close US allies.
It comes in the context of increased tensions between Gulf countries and their near-neighbour Iran. The Saudi statement accused Qatar of collaborating with Iranian-backed militias.