The blaze started at the home on Russell Island just after 6am on Sunday and is believed to have razed about three premises.
The five children and a man, who lived in the home where the fire broke out, are unaccounted for, Queensland Police said.
The Queensland Ambulance Service treated nine people at the scene, including neighbours, and two were taken to hospital in a stable condition.
"Investigations are underway to determine the cause of the fire," police said.
Fire investigators are waiting for the area to be declared safe before examining the scene.
Russell Island is eight kilometres long and nearly three kilometres wide and lies between the mainland and North Stradbroke Island.
It has a population of about 3,700.
Locals told AAP they were unaware of the blaze until they saw the news reports and that 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.
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