The killings bring the death toll to nine as vampire rumours have swept the country's southern region since last month, forcing authorities to impose a night-time curfew.
"One person was burned and another stoned to death by angry mobs in incidents on Thursday for being suspected to be blood suckers," police spokesman Ramsy Mushani told AFP.
The latest killings took place outside Blantyre, the country's commercial capital, where angry mobs clashed with police and blocked main roads to protest against the alleged vampire threat.
The country's police chief said the 124 arrests had been made in a "coordinated operation".
As public anger has grown, the UN -- which is involved in food aid and agricultural programmes -- pulled its workers out some areas for safety reasons.
In a report earlier this month, the UN said it had suspended all visits to the affected areas because the situation was "unstable and volatile".
Rumours of vampires allegedly originated from Mozambique and spread across the border to the Malawian districts of Mulanje and Phalombe, according to the UN.
President Peter Mutharika last week vowed to investigate the killings and the vampire rumours.
Malawi, where witchcraft is widely believed and education standards are low, is regularly dogged by reports of "vampire" activity.