The two had been arrested for the alleged rape and murder of a five-year-old girl at Namgo village in the district, the police said.
The mob yesterday overpowered the police personnel at the Tezu police station and pulled the two accused - Sanjay Sobar and Jagdish Lohar of Assam - out of the lockup.
The crowd then stripped the men, dragged them through the streets and beat them to death, the police said.
Chief Minister Pema Khandu has ordered a police inquiry and also a magisterial probe into the incident.
The body of the girl, who had been missing since February 12, was found near a tea garden, a few kilometres from the village, on Sunday.
The police claimed the two accused had confessed to the crime.
Three policemen including the in-charge of the Tezu station and a woman sub- inspector were suspended and the SP was transferred for their "inefficiency" in dealing with the matter, an official release said here today.
Expressing shock over the incident, the chief minister ordered a police enquiry by DIG Eastern Range Apur Bipin and said the report must be submitted within seven days.
Mr Khandu also ordered a magisterial inquiry into the episode.
"We are citizens of a great country who abide by the law enshrined in the Constitution. Our laid down rules and regulations do not allow us to take the law in our hands," Mr Khandu said, appealing to the people to maintain peace.
The chief minister, who described the rape and the mob action as "barbaric and inhuman", expressed solidarity with the family members of the minor.
He, however, said the police and judiciary should be equally respected as they were meant for the safety and security of the people.