The Larimer County Sheriff's Office says Falcon Heene's father built the saucer behind at their on Fossil Ridge Road in Fort Collins.
His brothers initially told officials that Falcon climbed into the basket attached to the saucer and, somehow, the rope holding the contraption in place became untied around 11:00 a.m.
Authorities say the balloon may have risen to an elevation of approximately 15,000 feet as it drifted over Colorado's eastern plains. Around 1:40 p.m., it crashed into an open field near 160th Ave. & County Road 79 in Adams County, approximately 50 miles southeast from where it first took flight.
During a news conference outside the family's home at 4 p.m. local time, Larimer County Sheriff Jim Alderden announced that Heene was located, alive and well. The boy had been hiding inside a cardboard box in the attic of the family's garage, Alderden said, giving reporters a 'thumbs-up.'
"He's been located. He's alive. He's at the house," Alderden said.
The Heene family addressed the media a short time later.
Richard Heene, Falcon's father and self-described amateur scientist, said the balloon was a "3DLAV" - an experimental, futuristic low-altitude vehicle designed to hover above the ground at an elevation of 50 to 100 feet.
"It was in the really early stages of the invention," Richard Heene said, holding Falcon in his arms. "This little guy got inside of it...I thought he did anyway, according to Brad (one of Falcon's two brothers)."
"He videotaped it and we watched it back and, sure enough, he got in," He said. "But obviously he got out."
Richard Heene said there was an electrical charge on the outside of the balloon designed to help steer the aircraft.
"Our biggest fear is that he was inside, he would kick the wires and get electrocuted." "This is a relief. We're going to watch him a lot closer," Richard Heene said.
Concerns the boy was inside the balloon as it drifted across northern Colorado prompted a massive emergency response, and massive media coverage. Helicopters tracked the balloon in-flight, waiting for it to come down on its own.
Once the experimental aircraft crashed without Falcon inside, authorities began searching the region for any sign of the child. Reports that something, or someone, had fallen from the balloon shortly after it took flight only helped fuel speculation.
The Heene family appeared on the ABC television show "Wife Swap." A website for the show said when Heene family members aren't together chasing storms, "they devote their time to scientific experiments that include looking for extraterrestrials and building a research-gathering flying saucer to send into the eye of the storm."
A photo of the family on the show's website shows what appears to be the helium saucer in the background.