The Mill Fire started shortly before 1pm local time on Friday just north of Weed, a city of about 2600 people 400 kilometres north of San Francisco.
The flames raced into the Lincoln Heights neighbourhood where a significant number of homes burned and residents had to flee for their lives.
Two people were brought to Mercy Medical Center Mount Shasta. One was in stable condition and the other was transferred to UC Davis Medical Center, which has a burn unit.
California Fire Siskiyou Unit Chief Phil Anzo said crews worked all day and night to protect structures in Weed and in a subdivision to the east known as Carrick Addition.
"There's a lot at stake on that Mill Fire," he said. "There's a lot of communities, a lot of homes there."
Weather conditions improved overnight and firefighters were able to get 20 per cent containment but another blaze, the Mountain Fire, that broke out on Friday northwest of Weed grew substantially. No injuries or buildings had been reported lost in that fire. The causes for both fires were under investigation.
Anzo estimated about 100 homes and other buildings were lost in the Mill Fire. Governor Gavin Newsom declared a state of emergency for Siskiyou County and said a federal grant had been received "to help ensure the availability of vital resources to suppress the fire."
Naomi Vogelsang, 46, may have lost her 10-year-old English bulldog, Bella, to the Mill Fire. Vogelsang said she was napping on a couch when a friend told her to leave immediately.
"Everything was black," she said Saturday. "Things were exploding, you couldn't see in front of your face."
A firefighter picked her up and put her on a firetruck to get to safety but her dog, due to turn 11 next month, would not follow. The houses all around her were burned.
Vogelsang said she slept on a bench in Weed on Friday night because she could not get a ride to the evacuation centre. On Saturday morning, she was planning to go to a casino with the $US20 ($A29) she had left.
"My dog was my everything," she said. "I just feel like I lost everything that mattered."
California is in a deep drought as it heads into what traditionally is the worst of the fire season. Scientists say climate change has made the West warmer and drier over the last three decades and will continue to make weather more extreme and wildfires more frequent and destructive.
In the last five years, California has experienced the largest and most destructive fires in state history. Weed has seen three major fires since 2014.
The latest fire started at or near Roseburg Forest Products, which makes wood products. Evacuation orders were quickly put in effect for 7500 people.
Yvasha Hilliard said she was home in Lincoln Heights when she heard "a big boom" and ran outside to see her neighbor's house on fire.
"It was like fire coming out of the sky," she said. "It was terrible."
Hilliard said her home was among those that burned. "We lost everything," she said.
It was the third large wildfire in as many days in California, which is now sweltering under a heat wave that was expected to push temperatures past 38C in many areas through the three-day Labor Day weekend.
Thousands also were ordered to flee on Wednesday from a fire in Castaic, north of Los Angeles, and a blaze in eastern San Diego County, near the Mexican border, where two people were severely burned and several homes were destroyed.
