Those charged with genuine criminal offenses should be tried in an independent civilian court, it said.
Bahrain is one of several Middle Eastern and North African countries embroiled in anti-government protests. The ruling royal family -- Sunnis in a majority-Shiite nation -- accuses protesters of being motivated by sectarian differences and supported by Iran.
In recent days, the government began special military prosecutions of some of the protesters.
Human Rights Watch said these court proceedings violate international law.
"Most defendants hauled before Bahrain's special military court are facing blatantly political charges, and trials are unfair," said Joe Stork, deputy Middle East director at Human Rights Watch.
In a meeting with U.S. President Barack Obama last week, Bahrain's Crown Prince Salman bin Hamad al-Khalifa pledged he is seeking national dialogue with the protesters.
Bahrain's crackdown contradicts statements the prince made, Human Rights Watch said.
"The Crown Prince may be sincere in his efforts to promote dialogue, but what good is that while back home the government is crushing peaceful dissent and locking up people who should be part of the dialogue," Stork said.
As of Monday, 82 people have received verdicts from the military courts and 77 of them have been convicted. The sentences have ranged from five years in prison to life -- as well as two death sentences, the organization said.
Some of the trials have started without the lawyers or family members of the protesters being notified, Human Rights Watch said.
Bahrain is home to the U.S. Navy's Fifth Fleet, and the United States has been concerned about the instability in the Persian Gulf island state.
On Monday, the country put dozens of doctors and nurses on trial, accusing them of taking control of a hospital during anti-government protests, storing weapons and keeping people prisoner.