A police official said on Sunday that officers had arrested five suspects, including two nurses and a doctor working at the Cairo hospital where the babies were sold for almost three years.
They sold almost 300 babies for $US570 (N90,000) each or less.
Police are searching for the hospital manager who escaped arrest.
The official said the network also performed caesarian operations on women who had left it too late for an abortion of an unwanted child in exchange for allowing the doctors to sell the babies, usually to couples who could not have their own children.
Adoption is illegal in Egypt, which adheres to Islamic law in some family matters.
Some couples have sought to bypass the ban by buying children.