A small fire erupted in the engine room of the 36ft vessel at about 2pm, a spokesman for Hampshire Fire and Rescue said.
Firefighters from Southsea along with a lifeboat team from the Gosport & Fareham Inshore Rescue Service (Gafirs) were scrambled to help the stricken boat.
The yacht’s automatic fire system kicked in and managed to quell the blaze before it gutted the boat.
However, the two occupants on board were unable to navigate it back into port.
The voluntary Gafirs team secured the vessel and towed it safely to Camber Dock, in Old Portsmouth.
Gafirs crewmen also checked the two people on the vessel for injuries as a precaution.
Firefighters were stood down as there was no active blaze on the boat when it arrived at the docks.