Media broadcast images of crowds of rescue workers at the Thunder River Rapids Ride at Dreamworld on the Gold Coast, the main tourist district in Australia's northeastern state of Queensland.
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"One of the rides sustained a malfunction, causing two people to be ejected from a ride, and the other two were caught inside the ride," Gavin Fuller, an official of Queensland Ambulance, told reporters.
The four dead ranged in age from their early 30s to their early 40s. It was not immediately clear if they were locals or tourists, police said.
Shares in park owner and operator, Ardent Leisure Group , dropped 7 percent in the final hour of trade after the incident, having spent most of the day little changed.
Dreamworld said in a statement it was "working as quickly as possible to establish the facts around the incident."
It added, "Dreamworld's focus and priority is with the families of those involved in this tragedy and will be providing an update to the public as soon as information becomes available."
"We are now working together with the park to try to determine how this tragic incident occurred."
Tuesday's tragedy ranks among the world's deadliest theme park accidents.
Earlier incidents include eight teenagers killed in a 1984 fire at the Six Flags Great Adventure amusement park in New Jersey in the United States; six people killed by a failed simulated rocket launch in Shenzhen, China, in 2010 and five children killed when the Battersea Park Big Dipper malfunctioned in Britain in 1972.