The group, including kids ranging in age from two months to 17 years, were rushed to Royal Hobart Hospital from South Hobart around 2.30am on Tuesday.

Five children and two adults were in a serious condition before their health improved.

All nine children were discharged on Tuesday afternoon in a stable condition, with the two adults also stable and expected to be sent home at night.

Fire investigators say carbon monoxide gas built up over several hours and was four-to-five times above a safe level.

"(It was) up over 200 parts per million which does get into that dangerous situation where you can get nausea, vomiting and shortness of breath," Tasmania Fire Service station officer Adam Doran told ABC radio.

"It was starting to get to a point where it would have been highly toxic and dangerous for the occupants."

The grill was being used to cook food on the bottom level of the two-storey house.

Carbon monoxide gas, which is created by burning any fuel including gas, oil, coal or wood, has no odour or colour and can be fatal.

"It's not easy for people to recognise when this might be happening to them," Mr Doran said.

"If you've got a cooker that's designed for outside, then it must only be used outside."

Symptoms of carbon monoxide poisoning include headaches, nausea, dizziness, fainting, shortness of breath and confusion.

The state's health department warns against using outdoor barbecues, charcoal grills and heat-bead stoves indoors or in enclosed spaces like caravans and boat cabins.

"It's important that people are aware of carbon monoxide and its threats," Public Health Director Mark Veitch told reporters.

"The gases from inefficient burning of gas stoves inside can accumulate and spread through a home.

"They're not detectable, you can't smell them."

Australian Associated Press