Forty-one passengers and three crew were on board the East by West ferry when its forward windows were smashed and the cabin was swamped with water, forcing the front of the boat deep into the water.
Inflatable boats from the Worser Bay surf lifesaving club carried people to shore.
Two men have been treated at Wellington hospital for hypothermia. Several had suffered minor injuries in the incident.
Passenger Mark Blackham says he regularly uses the ferry service and has sailed in worse conditions than those at the time of the accident.
Maritime New Zealand says it is conducting preliminary inquiries and may open a formal investigation into the incident.
Another passenger, David Woodnorth, says there was a moment of panic when waves broke in, and he thought the ferry was going down.
Wellington harbourmaster Mike Pryce says some of the crew were remaining on board to try to pump out the water. He says the boat was flooded and it is unclear whether it can be saved.
East by West managing director Jeremy Ward says his company has conducted more than 275,000 crossings of Wellington harbour in the past 22 years, often in worse conditions than those on Wednesday morning.