The blaze broke out shortly before 5:30 p.m. on a stairwell between the second and third floors of the home on Putnam Avenue in Bushwick, and engulfed the rest of the structure.
A law-enforcement source said the fire was sparked by a child playing with matches.
Firefighters searching the top floor found the bodies of a 62-year-old man and his 14-year-old daughter.
His 3-year-old daughter was still alive, but later died at Woodhull Hospital.
"I saw a firefighter coming out of the flames cradling a little girl's body," said neighbor, Joshua Lendy. "She looked badly burned. It was horrifying."
Kendall Wilson, 21, who lost his stepdad and two sisters in the inferno, said, "I don't know what to say. I can't describe this pain."
His uncle, Patrick Joyner, described the dead man as a devoted dad.
"He was such a good guy. He took care of all those kids," Joyner said.
"He loved those kids. This family was super close. We were happy."
A family friend said the father watched the children in the evenings while the mother worked at a nearby deli.
Lendy, 23, also saw a person trapped at the third-floor window.
"I saw him jump and plummet but I don't know if he landed on anything or anyone," he said.
The man's condition wasn't known.
Republished with permission of The New York Post