Crews reached the boy about 7 a.m. Monday and police spokesman Robert McDonald confirmed the body was Samuel Jones.
He lived in the house next door with his parents and two older siblings, a boy and girl ages 6 and 7, said Carlsbad police spokeswoman Lt. Jennifer Moyers.
Some young cousins were at the house Saturday when the boy was last seen playing in the yard.
The rural neighborhood is a mix of homes and vacant lots. A 4-foot-high chain link fence separates the boy's home from his neighbor's where the hole is located in the backyard. It's possible Samuel could have climbed the fence and simply fallen into the hole, which was dry, Moyers said.
There are no curbs or sidewalks in the neighborhood on the city's south side.
Samuel was reported missing Saturday evening, which prompted authorities to launch a search and issue an Amber Alert.
A renewed house-to-house search had just started shortly after daybreak Sunday morning when a detective found the 14-inch-wide hole, Moyers said.
Efforts to recover the body began Sunday afternoon after a detective shined his flashlight down and saw what appeared to be a boy dressed in clothing Samuel was last wearing. Searchers later sent a camera down the hole and confirmed a child was about 30 feet down. Temperature and oxygen levels were later taken and showed no signs of life.
The boy's mother and father were told of the discovery while at the scene.
The Amber Alert in effect for him was canceled Sunday night.
A large tracked excavator was used in the recovery along with metal shoring typically used in pipeline construction projects. A specialized search and rescue team from Roswell went Carlsbad to oversee the operations.