Shoalhaven police were able to calm hostilities when they arrived at the carnival.
Police arrested five teenagers, and took them into custody at Nowra Police Station.
They assisted with enquiries about the brawl.
The young people have since been released into the care of their parents.
The police investigation continues.
A family fun carnival was anything but fun for witnesses of a violent brawl which broke out after the fireworks on Australia Day.
Families dispersed from the Huskisson Carnival, as around a dozen police vehicles rushed to the scene at around 10pm on Friday.
Witnesses said at least 75 people were involved in the brawl, which erupted in the car park.
A witness said they were throwing glass bottles and rocks at each other in the car park and then the fight travelled down into the carnival.
They were allegedly bashing into the back of the portable toilets while little kids were inside, screaming, and then they barged through the kid's wild chairs ride which was near the entrance, brawling through the kids on the swings and knocking them about.
Parents were screaming because they couldn't get to their kids.
Another eyewitness said her 10-year-old saw a man with blood all over him, right next to the front entry.
“I just got my kids and we hightailed it back into town,” she said.
The shocking incident, reportedly involving teenagers, young and old, ruined the night for many.
Those who had parked in the car park were scared to return to their cars, where people were still fighting.
Bottles were smashed everywhere, leaving a trail of carnage for carnival staff to clean up.
It is believed alcohol may have been a factor in the brawl.