Thousands of militants laid siege to the police station, just south of the valley's main town Mingora, on Tuesday.
Troops were mobilised to break the militants' cordon but could not rescue the surrounded policemen and soldiers as darkness fell, officials said.
Swat valley has been the scene of a major battle since Saturday.
The clash is the latest in an operation against an increasingly powerful Taleban insurgency in the valley.
Dead-end roads
The insurgents attacked the security post in Shamozai village, police said.
They blew up the post and abducted the security men, who were then moved to an undisclosed location.
Roads which lead west, north and east of Mingora mostly connect areas of tourist interest and end in remote mountain valleys.
All have been virtually closed for regular traffic since 2007.
Only local people use these roads, but traffic is often disrupted or caught in crossfire.
The only road that has remained fully open is to the south, connecting Mingora with the rest of the country.
This is the region's main trading artery and strategically important to the security forces.
In the past, incidents of traffic disruption on this road have been rare.
But since last week, militants have repeatedly closed this road, forcing the army to impose curfew in the area, the BBC's M Ilyas Khan reports from Islamabad.
This means that Mingora is under virtual siege from all four sides.
Meanwhile, an army spokesman in Mingora said the security forces had consolidated their positions in the Sangota and Manglawar areas to the north, after two days of fierce battles.
He said there were still some pockets of resistance in the area, but fighting had largely died down.
Over the weekend, the army said it had captured high ground in Charbagh area and neutralised a strategic advantage the militants enjoyed earlier.
Fighting continues unabated in Kabal and Matta sub-districts of Swat.
