KCCI reports the explosion happened at around 4:30 p.m. in an area commonly known as Party Cove.
There were eight passengers on the boat when it exploded, including the owner and operator Michael Jenkins, of Ames.
The Johnston Fire Department says bystanders helped people on the boat get to the marina.
Officials say two passengers were treated at the scene for minor burns, then released. One passenger was taken to UnityPoint's Iowa Methodist Medical Center with more serious burns.
The fire and explosion destroyed the boat.
Investigators do not believe alcohol was a factor in the incident.