Elliot Foote, Steph Weisse, both from NSW, Will Teagle and Jordan Short were in a wooden speedboat around Sarang Alu and Banyak islands in Aceh's Singkil district.
They were part of a group of 12 Australian nationals and five Indonesians who were travelling to Pinang Island in two boats.
The area is known as a tourist destination with white sand beaches and good waves for surfing.
The boats left North Nias port on Nias island, around 150km from Indonesia's Sumatra island on Sunday afternoon, before being beset by bad weather and heavy rain.
Ten people in one boat sought shelter on Sarang Alu island, while the others continued the trip, Nias Search and Rescue Agency said in a statement on Monday.
The resort on Pinang Island later reported to the agency that the boat with 10 passengers had safely arrived, but the boat that had left earlier had not been seen.
Rescuers have sent at least two boats and a medical boat to the search area.
The Department of Foreign Affairs and Trade is working closely with Indonesian authorities to support search and rescue efforts.
The department is also providing consular assistance to the four families, a spokeswoman told AAP.
On Monday night, the families of the missing Australians issued a statement saying they were holding out hope they will be found.
"Our hearts are aching at the thought that Elliot, Steph, Will and Jordan are missing at sea. We continue to pray and hold out hope they will be found," it said.
"We'd like to thank the Indonesian authorities and the Australian government for their ongoing assistance while search and rescue efforts continue."
Elliot's father Peter Foote said DFAT had chartered a plane to circle the area where the boat went missing "but they weren't there very long".
"We really need eyes in the sky, helicopters or small fixed-wing planes, anything we can get," he told Nine's Today show on Tuesday.
"We still optimistic ... apparently they have food and water on the boat and the boat has a roof so it should be alright, it's got electronic stuff."
But Mr Foote said not knowing what had happened was hard.
"You feel it physically, in the stomach, everywhere," he said.
"It is really painful. Anyone who has been through it will know and understand. Yes, I haven't felt like this before. My heart is aching. It is just terrible."
Indonesia is an archipelago with more than 17,000 islands, and ferries and boats are a common form of transportation. With lax safety standards and problems with overcrowding, accidents occur frequently.
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