The Spirit Lake Fire Department and Arnolds Park-Okoboji fire boat were called to that location shortly after 1:30 pm.
The occupants of the boat managed to get off of it safely.
Authorities say the fire was out by the time firefighters arrived. The boat was towed to a nearby dock.
It's believed a mechanical malfunction with the engine may have been the cause.
The Iowa Department of Natural Resources Lakes Patrol assisted on the scene.