Witness Jake Bibee said the three people fell from Vernal Falls after they ignored warning signs and crossed a barricade to pose for photographs.
The people were identified as Hormiz David, 22, of Modesto, Ninos Yacoub, 27, of Turlock, and Ramina Badal, 21, of Modesto.
Yosemite search and rescue rangers were searching the Merced River downstream for the bodies.
Bibee, of Angels Camp, described a chaotic scene when he and a friend hiked to the top of Vernal Falls Tuesday.
At first he saw a man on the far side of a safety railing next to the 97m-high falls holding a screaming girl while another young girl took their photograph.
Two others in their party then crossed the barricade to pose for photos on a rock 18m upstream from the falls. He said the woman on the rock slipped and the man fell in trying to reach her. Another woman also fell in trying to stop them.
