Police were alerted just before 2pm (AWST) that the 6.4m vessel had overturned in Airport Creek, a tidal river system five kilometres south west of Derby.
The boat, which had two men, one woman and two girls onboard, capsized one hour after it had set off from Derby Jetty.
Four hours into an aerial search, around 5.40pm, a helicopter spotted the overturned boat on the shoreline and sets of footprints in mud.
The boat had drifted 17km south of its capsized location.
An hour later, the four passengers from the boat were found walking through marshland.
All four were uninjured and taken to Derby Hospital for observation.
The search for the skipper, a man in his 50s, will continue today.