Rescuers plucked 106 people to safety, the Customs and Border Protection agency said in a statement. Two people had minor injuries.
The search and rescue effort was continuing Tuesday afternoon, though it was unclear whether more people were missing. The maritime authority initially estimated 105 people were on board the stricken vessel.
Christmas Island, located around 500 kilometers (310 miles) south of Jakarta, Indonesia, is a popular destination for asylum seekers who crowd into rickety boats at Indonesian ports and pay smugglers to bring them to Australian shores. Hundreds have died while attempting the journey in recent years.
Australia is trying to discourage such risky journeys and announced last month it would no longer accept asylum seekers who arrive by boat. Instead, it is evaluating their claims and resettling verified refugees in Papua New Guinea or the tiny Pacific island nation of Nauru.