The boy was one of seven people inside, but the only one who didn't get out as the building went up in flames.
The blaze broke out sometime early Saturday, but wasn't noticed until shortly after 3 a.m. PT Saturday by police officers who were driving by on routine patrol.
Witnesses say RCMP made several attempts to get into the building, but were driven back by the heavy heat and smoke.
There were seven people inside — a woman, her sister and five of the woman's children. All managed to escape the fire except for the young boy.
After the fire was called in, the fire department arrived within about four minutes as flames poured from the upstairs windows.
Martin Drakeley is the assistant chief of the Nanaimo Fire Department.
"Our crews made some really brave attempts to knock back the flames while doing a search of the building, of the top floor," he said, "and found the child in the back bedroom."
Drakeley says the child was in cardiac arrest when he was brought out of the building, but was stabilized by paramedics. The boy was taken to Nanaimo Regional Hospital, but needed to be treated at BC Children's Hospital in Vancouver.
However, weather conditions wouldn't permit the use of the air ambulance so he was taken to the Vancouver hospital by hovercraft.
A thrift store on the ground floor is closed because of smoke and water damage. There is as yet no word from investigators on how the fire started.