The boy was seen going into the water at Bolton Bridge yesterday afternoon.
Members of the public told police he had entered the river and they had lost sight of him around 3pm.
Police named the boy as Aaron Page, from Pontefract, who was celebrating his eighth birthday with his family.
Inspector Kevin Franks from North Yorkshire Police said: "Aaron was out with his extended family, there was quite a lot of them, celebrating his eighth birthday at the Bolton Abbey estate.
"He was seen down by the stepping stones and it would appear he's got himself onto a steep bank where the river is quite deep.
"He slipped off and got himself into difficulty. There is a strong current in that part of the river and he has been dragged under."
North Yorkshire Police officers and cave rescuers were joined by firefighters and underwater search teams trying to find the boy. His body was recovered at 6.25pm.
A spokeswoman for North Yorkshire Police said officers were not yet able to identify the child.
The area around Bolton Abbey is popular with day trippers and draws vast crowds on summer weekends.