Police Capt. Mark Velez says the 17 were arrested about 8:15 a.m. Friday after a person fishing nearby saw them jammed into the small craft powered by an outboard motor.
Velez says the 16 men and one woman are believed to be from Mexico.
Three were hospitalized with minor injuries.
All 17 will be turned over to immigration authorities.
Velez says it isn't clear why they landed in upscale Palos Verdes Estates, but the beach is popular with kayakers.
Panga boats, which are slightly larger, are often used to ferry drugs or immigrants illegally into the United States from Mexico.