The blaze started at the Todman Street house on Russell Island just after 6am on Sunday and spread to other premises, razing three.
The brothers - aged 11, 10, four-year-old twins and a three year old - and their 34-year-old father lived at the home and are unaccounted for, Queensland Police said.
A woman, 28, who is the mother of the boys and the man's wife, managed to escape the blaze uninjured and is being treated by emergency crews.
"This poor lady has lost her entire family," Superintendent Mat Kelly told reporters on Sunday.
"She's terribly emotionally distressed at the moment, but doesn't have any actual injuries."
He said many in the close-knit community would be affected by the fire, including emergency services on scene who knew the victims well.
"[It] is truly tragic as these young boys could have become men into the future," Mr Kelly said.
Queensland Fire and Emergency Services Assistant Commissioner John Cawcutt described the scene as distressing for first responders who themselves lived on the island.
"It's obviously one of the worst fires we've had for a long time," Mr Cawcutt said.
"When you get a tragedy like this, it touches many people."
Russell Island has a rural fire station, but firefighters from the mainland travelled to the island on a barge to help local crews extinguish the blaze.
Mr Cawcutt said the main house was "completely demolished" by the fire, and its roof caved in, making search efforts for those missing difficult.
Emergency crews are expected to remain on scene for a number of days,
The Queensland Ambulance Service treated nine people, including neighbours, and two were taken to hospital in a stable condition.
Russell Island is eight kilometres long and nearly three kilometres wide and lies between the Queensland mainland and North Stradbroke Island.
It has a population of about 3,700.
Locals told AAP the affected homes were not too far from the centre of town.
Queensland opposition leader David Crisafulli praised the efforts of the first responders.
"The early reports are heartbreaking and this tight-knit community will need our support in the days ahead," he posted on social media.
Police are not treating the fire as suspicious at this stage.
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