The Thompson fire north of Sacramento, near the city of Oroville, sent up a huge plume of smoke that could be seen from space as it grew to more than 14 square kilometres. There was no containment.
But Oroville Mayor David Pittman said there had been a "significant drop in the fire activity," and was hopeful that some residents could soon be allowed to return home.
The fire's progress was stopped along the southern edge and firefighters working in steep terrain were trying to build containment lines on the northern side.
"On that north side they have some real struggles in terms of the topography," Pittman said.
More than a dozen other blazes, most of them small, were active in across the state, according to the California Department of Forestry and Fire Protection.
A new fire on Wednesday afternoon prompted a small number of evacuations in heavily populated Simi Valley, about 65km northwest of downtown Los Angeles.
California's largest blaze, the Basin Fire, covered nearly 57 square kilometres of the Sierra National Forest in eastern Fresno County and was 26 per cent contained.
In Oroville, a state of emergency was declared on Tuesday and evacuation centres were set up. The evacuation zone expanded on Wednesday into foothills and rural areas beyond the city that's home to about 20,000 people.
There was no immediate official report on property losses. An Associated Press photographer saw fire burn three adjacent suburban-style homes in Oroville.
The fire's cause is being investigated. Red flag warnings for critical fire weather conditions, including gusty northerly winds and low humidity levels, were in effect when it erupted.
Temperatures of 37C were forecast with hot conditions expected to continue into next week, the National Weather Service said.
Authorities warned of full legal consequences for any illegal use of fireworks during the July 4 holiday.
"Don't be an idiot, cause a fire and create more problems for us," Butte County Sheriff Kory L. Honea said.
"No one in the community is going to want that. And we certainly don't want this."
