"Seven people have been treated and transported to hospital by Ambulance Victoria paramedics after a hot air balloon landed heavily in Dixons Creek this morning", ambulance officials said.
Local reports said some of them were thrown from the basket as the balloon attempted to land after being buffeted by strong winds.
Images from the scene show passengers lying on the ground being treated by emergency crews.
Paramedics are treating the injured after the hot-air balloon came down near the Yarra Valley at Dixons Creek.
Injuries are not yet known, but five ambulances are on the scene.
A woman in her 60s with abdominal and back injuries, a man in his 60s with back, neck and ankle injuries and a man in his 70s with back injuries were taken to the Royal Melbourne Hospital.More news: Samsung Galaxy S9+ in Coral Blue leaks out
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Two women in their 50s have been taken Marnoondah Hospital, while a woman in her 60s has been taken to Box Hill Hospital with suspected ankle fractures.
"The basket was on its side and people were close around it".
A witness named Mark told 3AW radio he saw two balloons approaching the ground as he was driving nearby.
Other hot air balloon operators said they did not experience any trouble during their flights or landings this morning.
"It just didn't look right".