Their car was found wrapped around a tree by contractors working at a forest area on State Highway 32 near Whakamaru yesterday afternoon.
Police did not yet know when the crash happened, but said the family were last seen at their home in Whakamaru by family and friends at 8pm on Sunday night.
The car's front seat occupants were driver Lisa Crowley, 23, and her partner, Richard Melling, 37.
In the back were Mr Melling's son with a previous partner, 11-year-old Jordan Melling, and Ms Crowley's children Brody Crowley, 2, and a 3-week-old boy who police believe was yet to be named.
Taupo police area commander Inspector Steve Bullock this morning said the family had been living in Whakamaru for a number of years.
"They are well known in that small community. They have extended family in Taupo, Tokoroa and Mangakino, all townships nearby," he told Radio New Zealand.
"It's always a tragedy when a whole family passes like this, and especially close to Christmas, which is a time when we all reflect on our own lives and our own family. It is very traumatising for all involved."
Mr Bullock said the focus of police inquiries was to establish exactly when the crash occurred.
"We do know that they were last seen at their own home at around 8pm on the Sunday night, so we're asking anyone with any information as to their whereabouts between then and Tuesday afternoon to contact the police immediately."
Mr Bullock said from the direction of the crash, it appeared the family were returning home from the Tokoroa area.
The car appeared to have left the road and travelled several metres before it hit the tree. The wreckage could not be seen from the road.
Mr Bullock said the road was relatively straight with a moderate bend where the vehicle had left the road.
South Waikato Mayor Neil Sinclair said such a loss of life was a total tragedy so close to Christmas.
"...to lose what sounds like a family and two other people just before Christmas is shattering. I cannot imagine what it would be like for their families."
Mr Sinclair said people needed to take great care on rural roads, making sure not to rush, to make sure they made it to their destinations safely.