Koby Dakin, seven, his brother Kyle, aged 10, and an eight-year-old friend, Imogen Wright, were hospitalised after the castle flew into the air.
The horrifying scene occurred during a double christening celebration at the White House pub nearby in Whitby, North Yorkshire, when winds were gusting at up to 40mph.
Koby was airlifted to James Cook hospital in Middlesbrough where he is believed to being treated for a broken leg, two arm fractures, a broken rib, a punctured lung and head trauma. Although serious, his injuries are not thought to be life-threatening. Kyle Dakin injured his knee while Imogen suffered concussion. Both children were taken to hospital in Scarborough.
Police closed the road outside the pub on the seaside resort's West Cliff while the fire brigade removed the bouncy castle from the telegraph pole.
Chief Inspector Steve Smith, of North Yorkshire Police, said: 'It appears that the bouncy castle blew away in the winds and the three young people who were in it at the time got, to a certain degree, taken off the ground, and they've received some quite serious injuries in two cases.'
He said one boy had suffered spinal, leg and arm injuries, and the girl had suffered a head injury.
A force spokesman said: 'All three remain in hospital in stable conditions. The bouncy castle was recovered with the help of officers from the North Yorkshire Fire and Rescue Service.
'There is no longer any police involvement with this incident and the circumstances leading to the bouncy castle leaving its tether will be conducted by officers from the environmental health department at Scarborough District Council.'
Let's hope they all make a speedy recovery.