Searchers made the disturbing discovery about 12 hours after the family was reported missing Monday night.
"To my knowledge, I've been here 20 years and I've never seen an incident like this before," says Mariposa County Sheriff Jeremy Briese.
The missing persons call came from a nanny who then told the couple's house manager.
Briese says the family members are avid hikers.
He believes the couple lived in Mariposa County for the last year and a half and hiked the area before.
"What we do know is that they are residents from Mariposa," he said. "They are new residents to the county. He is an engineer from the UK, and she was from Southern California. I believe they met and were living in San Francisco before they moved to Mariposa."
Authorities say there is no obvious trauma and no signs indicating the cause of death, so they have brought in the Department of Justice forensic team to analyze the scene along with Lemoore Air Support and California Highway Patrol.
Authorities are also performing an autopsy and testing on the dog that died.
"I know there has been some speculation and we haven't confirmed that, but there is signage from the forest service regarding an algae bloom," Briese said. "There's some signage up there that could be poisonous but at this point, we can't rule anything out."
Authorities say they have not been able to rule out the possibility of foul play.