Sergeant Simon Matheson, of Queenstown, said the North Island family were with a group of friends in four privately-owned jet-boats.
As their boat exited the Rockburn Chasm, about 20km north of the township, it hit a submerged log and flipped over, Sgt Matheson said.
The incident occurred about 2.30pm.
The woman sustained critical injuries, the man serious injuries, and the two children moderate injuries.
They were flown from near the accident site, which was only accessible by boat or helicopter, to Dunedin.
The woman’s injuries were not considered life-threatening, he said .