The Japanese Coast Guard says the boat, escorted by four Taiwanese government ships, was turned away about 30 kilometers from the islands, which are controlled by Japan, but also claimed by China and Taiwan.
Taiwan's official Central News Agency says the activists had wanted to reach the islands to install a statue of Matsu, the "goddess of the sea," which they believe will help protect Taiwanese fishermen in the area.
The islands, called Senkaku in Japanese and Diaoyu in Chinese, have become a flash-point for small-scale conflicts in recent months, mostly between Japanese and Chinese vessels.
More recently, both countries have also sent fighter jets to patrol the islands, raising fears of war between Asia's two largest economies.
The uninhabited islands are located in a strategic area of the East China Sea and are surrounded by rich fishing grounds and potentially vast energy deposits.
Taiwan, which refers to the islands as Diaoyutai, has shied away from major confrontations in the dispute,although Japanese government vessels also drove off about 50 Taiwanese boats from the islands in September.