The 17 person crew donned cold water survival suits and lifejackets before launching in two 25-man lifeboats with canopies.
The Coast Guard continues to monitor the situation and assess the weather conditions to determine the soonest Coast Guard aircraft or surface assets can be on scene to conduct effective rescue operations.
Coast Guard Sector North Carolina initially received a call from the owner of the 180-foot, three mast tall ship, HMS Bounty, saying she had lost communication with the vessel's crew late Sunday evening.
The Coast Guard 5th District command center in Portsmouth subsequently received a signal from the emergency position indicating radio beacon registered to the Bounty, confirming the distress and position.
An air crew from Coast Guard Air Station Elizabeth City launched aboard an HC-130 Hercules aircraft, which later arrived on scene and reestablished communications with the Bounty's crew.
The vessel was reportedly taking on water and was without propulsion. On scene weather is reported to be 40 mph winds and 18-foot seas.
The vessel is about 160 miles west of the eye of hurricane Sandy.
The Bounty is a replica of the original HMS Bounty, and was built in 1960 for the MGM movie version of Mutiny on the Bounty, which starred Marlon Brando. The Bounty has appeared in many films and documentaries, including Treasure Island, Yellowbeard, Sponge Bob, Square Pants, the Movie, and Disney's Pirates of the Caribbean - Dead Man's Chest.