The 17-year-old boy, who was paid $3,500, was recruited from an online chat room and is now suffering from kidney failure and in deteriorating health, the Xinhua news agency said.
A surgeon and four others have been arrested and are facing charges of illegal organ trading and intentional injury.
The kidney donor, only identified by his surname Wang, agreed to the April 2011 operation in the central province of Hunan without his parents' consent, the report said.
One of those detained was a hard-up gambler identified as He Wei, who acted as a middle-man between a hospital worker and the teenager.
Health ministry statistics show that about 1.5 million people in China need transplants, but only around 10,000 transplants are performed annually.
The huge gap has led to a thriving illegal market for organs.