The vessel, the Elusive, was on the Piscataqua River heading toward a marina in New Castle around 4 pm Saturday when a passenger noticed black smoke below deck, the New Hampshire Department of Safety said in a statement.
The Coast Guard and the New Hampshire State Police Marine Patrol posted photos of the flames and thick black smoke pouring from the vessel.
Three passengers, as well as two dogs, jumped overboard as the boat became engulfed in flames.
They were rescued by other boats.
READ MORE: Hamish Blake wins Gold Logie
The passengers, identified as Arthur Watson, 67, and Diane Watson, 57, both of New Canaan, Connecticut, and Jarrod Tubbs, 33, of Jupiter, Florida, were taken to a hospital, treated and released.
Despite efforts to save the yacht, it drifted into Maine waters and eventually sank about two hours after the 911 initial call, authorities said.
The cause of the fire is being investigated.