The two men and two women went into the water when their Bayliner boat hit a rock at Rubh'a Chruidh island, off the isle of Kerrera, near Oban, Argyll and Bute, just before midnight on Saturday.
They waded ashore and knocked on the door of island owner David Hamilton. Mr Hamilton invited them in to get warm by his log fire, while the emergency services were alerted.
He said he had not heard the impact of the boat hitting the rock and added: "We just heard a knock on the door.
"They were soaking, so we made them a cup of tea and gave them towels and they sat by the hearth of the fire.
"One of the girls had a cut on her head, but they were all walking.
"The boat will probably be a write-off. He (the skipper) said he hit a rock and the thing just tipped over and they all fell out."
Oban lifeboat was launched to pick the group up from Mr Hamilton's house. Coxswain Lewis Drysdale said he believed the four were from Argyll.
Mr Drysdale said: "They managed to wade ashore and raise the alarm. They were incredibly lucky, they had a very lucky escape."
The lifeboat took the group back to Oban Lifeboat Station, from where they were transferred by ambulance to the town's Lorn and Islands Hospital for a check-up.
Mr Drysdale said: "The temperature is pretty cold at the moment, so they were a bit cold and uncomfortable but we had an update today and they are fine."