It is understood water flooded the vessel and the engine failed, causing it to overturn.
The Bundaberg RACQ CareFlight Rescue helicopter responded to the incident at 3pm after a distress beacon was detected by the Australian Maritime Safety Authority (AMSA).
A Royal Australian Air Force (RAAF) C-130J Hercules and a Water Police vessel from Hervey Bay were also tasked by AMSA to respond.
CareFlight’s rescue crew located the stricken vessel north of Sandy Cape.
Two men were winched from the water first and dropped off on the beach with the Flight Intensive Care Paramedic.
The helicopter then returned to the stricken vessel to pluck the remaining three men from the ocean.
All five men were then transferred to Orchid Beach on Fraser Island.
The men, who are believed to be aged in their 30s, had been in the water for approximately two and a half hours.
They were a bit shaken up, but otherwise unharmed.