The two children, aged seven and 10, were staying at the chalet in the village of Isola in France’s Alpes-Maritimes region during the school holidays.
A team of around 60 paramedics and firefighters with sniffer dogs was sent to the scene at 5am on Sunday as part of the rescue operation.
Three adults managed to pull themselves free from the wreckage but two others had to be rescued by the response teams. They were being treated for minor injuries.
According to local gendarme official Gael Marchand, two families had rented the chalet, which had been converted from a sheepfold, for the school break.
He said that the rock, which was 32ft high and 16ft wide, could have broken off after being weakened by heavy rains last month.
The victims of the accident have yet to be identified.
The nearby Isola 2000 ski station had to be shut down because of avalanche fears.
The mayor of the village, Jean-Marie Bogini, said: “It happened in a chalet on the outskirts of the village. There was a landslide.
“There were seven people in the house – five adults and two children.”