The New York-based rights watchdog demanded a clarification on Friday from the kingdom, and said surveillance software allegedly made by Italian firm Hacking Team was mostly targeting individuals in Qatif, a site of protests since February 2011.
Cynthia Wong, HRW's senior Internet researcher, said: "We have documented how Saudi authorities routinely crack down on online activists who have embraced social media to call out human rights abuses.
"It seems that authorities may now be hacking into mobile phones, turning digital tools into just another way for the government to intimidate and silence independent voices."
Saudi authorities have yet to respond to the reports.
HRW said security researchers at the Toronto-based Citizen Lab had identified a malicious, altered version of an application providing mobile access to news related to Qatif, which if installed on a mobile phone infected it with spyware made by Hacking Team, which only sells to governments.
The spyware allows a government to see a phone's call history, text messages, contacts and emails and files from social media, HRW said.
The spyware also allowed authorities to turn on a phone's camera or microphone to take pictures or record conversations without the owner's knowledge, it said.
Anti-regime protest rallies in the Eastern Province, where most of the kingdom's two million Shia live, erupted in 2011 alongside a protest movement in neighboring Bahrain.
The protests took a violent turn in 2012. Clashes between police and protesters have so far killed 24 people, according to activists.
In March, the Amnesty International warned that many of the reforms in Saudi Arabia have been vaguely worded promises to "consider" changes.
The kingdom was handed 225 recommendations at the 17th session of the Working Group of the Universal Periodic Review (UPR) of the UN Human Rights Council (UNHRC).
NTJ/MB