Firefighters were called to Portopetro in Santanyi in the early hours of Tuesday morning to douse a fire.
Two boats that were moored in the port were completely gutted by the flames and eventually sank, and a third boat suffered minor damage.
The blaze started just before 05:30 and it took firefighters from Felanitx, Llucmajor and Manacor around three hours to put it out.
The sinking of the two boats activated the pre-alert phase of the Special Contingency Plan for Marine Water Pollution and Civil Protection volunteers and firefighters have installed an anti-pollution barrier to prevent damage from a possible spill.
An investigation has been launched to determine the cause of the fire.