Sergeant Tod Hollebon, of Te Anau police, said a group of five people thought to be four men and one woman parked on the Te Anau side and entered the 1.2-kilometre tunnel on foot just before midnight last Saturday.
The road tunnel links Milford Sound and Te Anau on State Highway 94, and January is one of the busiest times of the year.
"They've spent considerable time in there, approximately an hour, and then during that time have caused extensive damage to some lighting and power boxes in there,'' Sgt Hollebon said.
"It's unusual and a bit disturbing.''
Police are appealing for information about the incident.
In a statement, NZ Transport Agency's acting southern manager Ian Duncan said police were following promising leads after reviewing video footage of the "reckless act''.
Security at the tunnel is being reviewed.
Mr Duncan said 30 of the 36 exit lights were smashed. The agency could not confirm that the work had been completed.
"There has been isolated incidents of vandalism at the tunnel in the past, but nothing on this scale," Mr Duncan said. "Fortunately, the damage hasn't affected the operation of the tunnel.''
- By David Williams.
