The 75-foot Conception was anchored about 20 yards off Santa Cruz Island when the scuba diving vessel caught fire about 3:15 a.m., said Mike Eliason, a spokesman for the Santa Barbara County Fire Department.
Multiple agencies responded to the scene, where five crew members who jumped overboard were rescued by a good Samaritan's pleasure craft, according to the U.S. Coast Guard. One of the rescued individuals suffered a broken leg.
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The Conception sank in 64 feet of water as firefighters were battling the flames, leaving the bow protruding from the water, officials said.
The identities of the victims who were found dead were not immediately released. There were 39 people on board at the time and nine remain missing.
Of the four victims whose bodies were found earlier in the afternoon, two were male and two were female, according to Santa Barbara County Sheriff Bill Brown.
"This is probably the worst-case scenario you could possibly have," Brown said. "Fire is the scourge of any ship," he said.
The boat trip was touted as a Labor Day weekend dive trip that started on Aug. 31 and was scheduled to return Sept. 3. There were six crew members on board and one of them is among the missing. Passengers who were in the bottom of the ship were likely sound asleep at the time of the fire, Brown said. The boat was in a remote location and there was limited firefighting capability. "You couldn't ask for a worse situation," he said.
At a morning press conference in Oxnard, a Coast Guard spokeswoman said the five crew members were awake and on the bridge of the boat when the flames broke out.
The crew members were able to escape on a dingy and were pulled from the water after banging on Bob and Shirley Hansen's boat. The Hansens were told one of the crew members had a girlfriend on board the engulfed boat.
They were also told by the crew that there were three birthday parties on board the boat, including one of a 17-year-old.
The Coast Guard said the boat was inverted on the sea bed in 60 feet of water.
After a Ventura County Fire Department spokesman described the ongoing operation as a "recovery effort," the Coast Guard official said responders were still in "response mode," meaning they are still part of a search-and-rescue phase.
The operation was supported by helicopters, small boats and a patrol cutter.
Family members looking for information about their loved ones are asked to call (833) 688-5551. A family assistance center is being established at Earl Warren Showgrounds, 3400 Calle Real, Santa Barbara. For information, call (805) 696-1188.
The cause of the fire was unknown.