Firefighters were digging with their bare hands to pull 11-year old Ciro, the last of three brothers buried in the debris, about 13 hours after the quake struck.
Eleven-year old Ciro was recovered alive almost 16 hours after the quake hit. Firemen hours earlier saved his seven-year old brother Mattias and seven-month old baby Pasquale.
"There was silence for a while, they were tired. Then they began speaking again and we drew comfort from that," said Luca Cari, a firefighter spokesman.
A woman was killed in Casamicciola, in the north of the small tourist island, by debris that fell from a church, while the body of another was spotted in the rubble of a collapsed house, local media reported.
Firefighters broke into applause as a dusty Mattias, 7, was pulled free from under the bed where he had taken refuge. His 11-year old brother Ciro was conscious and talking to rescuers as they dug through to him.
Emergency workers had previously recovered the boys' seven-month-old brother, Pasquale, crying but alive, after hours of effort overnight after their pregnant mother sounded the alarm.
"In Casamicciola, a building collapsed and three people were pulled alive from the rubble - two women and a man," the head of the local department of civil protection, Angelo Borrelli, said at a press conference early Tuesday.
Two small communes, Casamicciola and neighbouring Lacco Ameno, had borne the brunt of the quake, he added.
View of the damages buildings after a 3.6 magnitude earthquake in Ischia island, Italy, 21 August 2017. Source: AAP
The quake hit the northwest of the island at 8.57pm (1857 GMT), at a depth of just five kilometres.
Italian authorities first put Monday night's quake at a 3.6 magnitude, but later revised it upward to 4.0 magnitude.
The main earthquake was followed by 14 smaller aftershocks, Borrelli said.
Several buildings in the area collapsed while others had large, ominous cracks.
Thirty-nine people were injured, one seriously.
'A horrible experience'
The Rai News 24 television channel broadcast images of holidaymakers by their cars with their bags packed, with other people sitting in their gardens or outside their houses.
Many cars were waiting at the Ischia port eager to head back to Naples.
The quake struck just days ahead of the first anniversary of the 6.0 magnitude quake that killed nearly 300 people in and around Amatrice in central Italy. In October 2016 and January 2017 three other earthquakes hit the same region.
Francesco Peduto, head of Italy's National Geologists Association, on Tuesday slammed shoddy construction and a lack of earthquake prevention measures, saying a 4.0-magnitude quake should not have brought down buildings.
"It's frankly extraordinary that people continue to die for earthquakes of this size," he said.
The quake response has benefited from the presence of emergency responders who were on the island to fight the forest fires that have plagued Italy this summer, local media said.
"I was on the couch watching TV. Blackout, shaking, something fell on my head. I scream, my mother grabs me and we ran outside," one witness wrote on Twitter.
Teams of firefighters, including two units specialised in extracting people from rubble, were quickly mobilised, said Bruno Frattasi, who oversees the fire department.
Ischia's only hospital was also hit and had to be partially evacuated, with five patients transferred to another medical facility by helicopter.
Restaurants were packed and many stores were still open when the shaking began, witnesses said on Twitter.
"A horrible experience, everything was shaking, plunged into darkness, houses were collapsing... a nightmare," one wwrote
Ischia is often hit by earthquakes, with its worst dating back to July 1883, when an estimated 5.8-magnitude quake killed more than 2,000 people.
Italy straddles the Eurasian and African tectonic plates, making it vulnerable to seismic activity when they move.
