The mother, 43, a three-year-old girl and a four-year-old girl were trapped in a back room with security bars on the window.
Metropolitan Fire Brigade Commander Phil Cline says firefighters managed to break in through a back door and rescue the trio.
“They were actually pressed up to the metal bars crying for help,” Mr Cline said.
“So when the firefighters knocked out the fire in the kitchen and lounge room, they proceeded straight through down a hallway and broke into the bedroom.
“And then they literally carried the woman and two children out.”
The mother was taken to the Royal Melbourne Hospital for observation.
The young girls escaped injury. The two boys, aged 12 and 16, suffered burns.
Police say a man, 42, has been arrested and is being treated at Sunshine Hospital.
Follow Ashleigh Brown’s reports at 3AW Fairfax Radio News.