"Border Protection Command assets are currently conducting a search approximately 65 nautical miles northwest of Christmas Island for a possible foundered vessel," a spokesman for Home Affairs Minister Jason Clare said.
"The search is being coordinated by the Australian Maritime Safety Authority's Rescue Coordination Centre," he added, without specifying what triggered the search.
No details were available on the number of people onboard, but vessels carrying asylum-seekers are regularly overcrowded with scores of people.
Australia is facing a steady influx of asylum-seekers arriving by boat, many paying people-smugglers for passage on leaky wooden vessels after fleeing their home countries.