The Coast Guard says the Brielle, N.J.-based Dirty Martha started sinking at about 11 a.m. on Thursday.
The 37-foot Gloucester-based sailboat Alambre picked up the captain, who had deployed his liferaft.
The Coast Guard said the man is 41 years old, but did not release his name. He did not require medical attention.
The captain told Coast Guard personnel he had been having engine trouble, but had no idea why the Dirty Martha started taking on water. The sinking remains under investigation.
The Dirty Martha is submerged in about 162 feet of water and is not a hazard to navigation.