The three children were playing in the house, known as a bounce house, in South Glens Falls when it was lifted off the ground. Taylor Seymour, who witnessed the incident, said the wind spun the house around.
Seymour told the Glens Falls Post-Star one of the boys, aged 5 and 6, fell about 15 feet to the street, landing on asphalt, while the other fell onto her car.
"It was like a horror movie," she said. "It just kept going up and up. It cleared our building and the trees."
Police recovered the bounce house some distance away on the grounds of a school.
The girl's mother said her 10-year-old daughter was lucky and slipped out of the house as it became airborne. She escaped with a few cuts.
"My older daughters witnessed it and said it was just horrible," the mother said. "A big gust of wind just blew it right off the ground with the kids in it. It's just sickening."
Police said a resident of the apartment complex had set up the bounce house for neighborhood children. The owner of the toy said it was staked to the ground but the wind was apparently able to shake it loose.
Officials at the Albany Medical Center said the boy who fell to the street suffered a serious head injury. A neighbor said the other boy broke both arms.