Five people and a dog have been rescued after boat began sinking off the coast of Townsville in North Queensland.

A 45-year-old woman, a 28-year-old woman, a 50-year-old man, a 41-year-old man and a blue heeler puppy called Sooky were found on a sinking inflatable boat 30 nautical miles off the coast of Cape Bowling Green about 6.30am.

They were rescued by Queensland Government Air (QGAir) Rescue 521 after they set off a beacon.

Their boat was a seven-metre inflatable boat used to service a 120-foot yacht, but the yacht was not within swimming distance of the boat.

Investigations into the cause of the incident are ongoing.