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The owner, who was on land, confirmed three people were on board the 10m crayfishing boat Mary Ellen 2.
Two fishing boats headed to the scene and picked up the three crew members from the bow of the partially submerged vessel.
Rescue Co-ordination Centre NZ senior search and rescue officer Dave Wilson said the beacon saved their lives.
"The only way we knew they were in difficulty was the alert from the EPIRB distress beacon. It's vital to have one on board," he said.
"We used the local Chatham Islands VHF radio channel to request help for the stricken vessel."
After the boat was swamped by a wave, the skipper tried to dive down into the boat for the beacon but was unable to reach it.
Fortunately, it worked automatically and floated to the surface, alerting the rescue co-ordination centre.
Mr Wilson said the rescue happened only because the other boats tuned into the VHF network and were able to assist.
The beacons became compulsory on commercial fishing vessels from January 1 and vessels between 7.5m and 24m operating outside enclosed waters are required to install them.