The Australian Maritime Safety Authority said the boat, carrying about 105 passengers, sank 220 km north of Christmas Island, where Australia operates a detention camp for asylum seekers.
After receiving a call for help, an Australian navy ship rushed to the scene. Rescue officials said the asylum seekers boat had sunk when they arrived.
A merchant ship and a rescue plane were sent to the scene to help passengers struggling in the water.
Christmas Island, located 500 km south of Jakarta, Indonesia, is a popular destination for asylum seekers who crowd into rickety boats at Indonesian ports and pay smugglers to take them to Australian shores.
Hundreds of people have died while attempting the journey in recent years./.