The incident occurred on the Thunder River Rapids ride, which is a water-based raft ride using a conveyor belt, about 2.20pm Queensland time.
Queensland police confirmed four adults had been killed. Dreamworld has been evacuated.
Gavin Fuller of Queensland Ambulance said two of the victims were "ejected" after a "malfunction" on the ride, while two others were caught inside.
The dead were aged from 32 to early 40s. Mr Fuller said their injuries were so severe they were "incompatible with life".
Police refused to say if the victims were related or if any other relatives were on the ride at the time.
Another ride at Dreamworld was shut down for a weekend in April after a man nearly drowned on it. Worksafe Queensland allowed it to reopen after an investigation.
Dreamworld chief executive Craig Davison confirmed that four adults died on the Thunder River Rapids ride at approximately 2.20pm.
He said the park is now closed and Dreamworld is "working to establish facts around the incident."
He said he was "deeply shocked and saddened", and "our hearts and thoughts go out to the families involved".
Queensland police spokesman Tod Reid said the forensic crash unit and workplace health and safety were at the scene of the accident.
He said police were working with Dreamworld to determine what happened.
Reid said he wasn't aware of any earlier issues with the ride, and couldn't say if the four were related.
Gold Coast mayor Tom Tate issued a statement reflecting the community's shock at the news.
"This is a very sad day for our city," Cr Tate said.
"Our thoughts are with the families of those affected - and the emergency staff in attendance."
The Thunder River Rapids Ride is currently Australia's only river rapids ride and opened on December 11, 1986, reports the Gold Coast Bulletin.
Riders board one of several six-person circular rafts.
The raft is dispatched and the riders travel back past the ride's queue and into a cave.
Upon exiting the cave, riders experience the main rapids section of the ride. This section runs alongside a large water catchment which powers both the Thunder River Rapids Ride and the Rocky Hollow Log Ride.