Four adults and three children have been rescued, after their 60 foot vessel aground in Coose Bay.
Lough Derg RNLI was requested by Valentia Coast Guard to assist at 3:40pm on Thursday.
A cruiser had run aground in Coose Bay, between Split Rock and Hagen Rock.
Volunteer crew arrived on the scene and assessed the situation.
Two marine engineers were also at the scene.
The RNLI said the vessel was aground on extremely hazardous shoal.
All passengers were wearing their lifejackets and were unharmed.
RNLI volunteers transferred to the cruiser and checked for ingress of water.
They found none, but established that there was "significant damage" to the rudder.
The lifeboat crew set up for a tow and eased the cruiser off the rocks and into safe water.
The tow was passed to the cruiser company's rescue vessel.
An RNLI crew member remained with the vessel until they were satisfied that the handover was complete.