The incident occurred around 9am when eight men wearing government-style caps and carrying apparent official documents opened fire with machine guns on the tea shop in Moo 5, tambon Kehraw.
The victims were identified as Chalee Samato, Harong Taba and Tuansoh Waba. A fourth man was injured at the scene.
"They were dressed like security officials and carried official documents pretending that they were there to gather information," AFP quoted Pol Maj Prathuang Suwanchatri of Raman police as saying.
"We had intelligence that the insurgents were going to attack teachers and soldiers, but we didn't expect them to attack villagers," Internal Security Operations Command (Isoc) spokesman Pramote Promin told the DPA news agency.
Earlier in the day, eight closed-circuit television cameras were set on fire in tambon Ban Rae of Than To district of Yala, according to local reports.
As well, two rubber tappers were shot and wounded while working in their plantation in tambon Kala of Yala's Kabang district early Saturday morning.
Yala is one of three southern border provinces that have suffered in continuing violence since 2004 that has resulted in at least 5,700 deaths.
Peace talks in Malaysia between Thai authorities and some rebel groups, including the Barisan Revolusi Nasional, had raised tentative hopes of peace.
The BRN has threatened to pull out of the dialogue, although new discussions about the direction of the peace talks took place on Friday.
After the meeting army chief Gen Prayuth Chan-ocha said authorities were willing to continue talks next month, but urged rebels to end their attacks.
"We regret all of the losses and injuries but if you (the rebels) want to submit demands, you must stop all violence first," he said.