Authorities said the 2003 Monterey launched just before noon at the Sunset Beach Harbor and minutes later it exploded about 200 yards out. Fire officials said it might have been caused by a fuel leak.
At least four of the nine people on board were thrown into the water.
"There were some burns, there were some contusions and cuts," said Sgt. Jeff Foster of the Orange County Sheriff's Harbor Patrol. "We understand that there were also some bones that were fractured and there's at least one person that we know of right now that's in surgery for damage to his leg."
Paramedics transported eight patients, four of them taken to trauma centers. Their ages ranged from 14 to 60, Foster said.
Authorities said there was a mechanical problem and the people on board were trying to fix it when it exploded.
Other boaters heard what they described as a sonic boom and saw flames.
Retired Harbor Patrol reserve officer Tom Cantwell called for help and steered his boat toward the wreckage. He said the victims were not wearing life jackets.
"The boat was fully engulfed in flames," he said.
The fire on the boat was extinguished and measures were taken to prevent the spread of any hazardous materials, but the wreckage remains in the water as officials work to retrieve it, Foster said.
City News Service contributed to this report.