The group had deployed what is widely known as a signal tube to make themselves more visible. The devices are brightly colored, and stand vertically in the water.
Coast Guard officials launched a search operation on Monday after a diving instructor reported that seven people had gone missing.
They reportedly went to explore a coral reef about 10 kilometers off the coast of Itoman city.
They say they were "drift diving", which involves being transported by ocean currents.
All were found uninjured.
Experts point to risks
A local expert who spoke to NHK says drift diving is for intermediate and advanced divers.
"You can enjoy being transported by the tide, instead of staying at a fixed location," says Sora Ryotaro, who owns a diving shop on Okinawa's main island.
"And you can encounter fish you wouldn't usually see," he continues.
But Sora also points to the risks.
"The strength of the current and the environment can vary significantly even in a small area, such as the distance between an instructor and a diver. If someone separates from the group, it can be difficult to join up again."
Drift divers enter the sea from a ship, and the captain is tasked with predicting where they will resurface based on the water conditions.
Yanaoka Shujiro, a diving instructor on the island of Taramajima in Okinawa, says people must be prepared for any eventuality.
"Waves can make it hard for the captain to find the divers. Signal tubes like the one used by the group that was rescued can help," he says.
8 deaths this year
The Japan Coast Guard says 30 people have been involved in accidents this year while doing marine sports in Okinawa Prefecture. Eight were killed. The figures are as of June 18.