Hannah Witheridge, 23, and David Miller, 24, were found dead on a beach on the island of Koh Tao on Monday.
British brothers Christopher and James Ware were questioned but police now say there is no evidence against them.
Officers had said there was "strong evidence" against Burmese suspects, but now say there are no DNA matches.
Forensic tests carried out on Ms Witheridge's body revealed traces of semen from two different men, neither of which matched DNA from Mr Miller, the Ware brothers or 11 Burmese people they have been questioning.
Meanwhile, Thailand's prime minister has apologised after he appeared to suggest beautiful women in bikinis could not be safe.
BBC south-east Asia correspondent Jonathan Head said police have admitted they "really don't know where to look now".
He said investigators had several problems, including that the crime scene was not sealed off and people were not stopped from leaving Koh Tao after the killings.
"The impression we got from a police press conference [on Thursday] was they haven't really made much progress at all," he added.
He said police were looking for a group of men who were heard singing "Western pop songs" near the crime scene.
Post-mortem examinations showed Ms Witheridge, from Hemsby in Norfolk, died from head wounds and Mr Miller, from Jersey, died from severe blows to the head and drowning.
Police said Mr Miller also suffered wounds on his hands, which indicated a struggle had taken place.
Their bodies were found close to the beach-side bungalows where they had been staying. A garden hoe believed to have been used in the attack was found nearby.
Members of Ms Witheridge's family have arrived in Bangkok and had a meeting with Thailand's deputy police chief.
British consul Michael Hancock said they were "deeply distressed" and it was "very important for the family" to speak directly to a senior police officer.
Thailand's paradise island murder mystery
The Ware brothers, believed to be from Jersey, were stopped at Bangkok International Airport as they prepared to leave the country.
Police earlier said they were "possible suspects" but did not arrest them. Formally making people suspects is an official judicial process in Thailand.
The BBC understands they have now been told they can leave Thailand.
British freelance journalist Andrew Drummond, who lives in Bangkok, said the investigation seemed to have followed the "same pattern" as those into previous killings of Britons in Thailand, such as the unsolved murder of Kirsty Jones in 2000.
"Police initially seem to always seek the foreigners or the immigrants as the main suspects and that certainly happened in this case," he said.
"We've had a week of toing and froing between British suspects and Burmese immigrant suspects and now we find out that... the DNA doesn't match anybody."
Speaking earlier this week, Thailand's prime minister appeared to suggest attractive women put themselves in danger by wearing certain clothes.
"Can they be safe in bikinis... unless they are not beautiful?" he said.
General Prayuth Chan-ocha, who led a military coup in May, has since said: "I'm sorry that it [the comment] hurt people."
Ms Witheridge's family described her as "a beautiful, intelligent, loving young woman who poured joy into the lives of all who knew her".
In a statement, Mr Miller's family said he was "hard-working, bright and conscientious, with everything to look forward to".
Thai police admit they are struggling to find the killers of two British tourists, after it emerged crime scene DNA did not match that of any suspect.