Talks were set to resume Sunday afternoon. If an agreement can't be reached, the union says teachers will return to the picket lines Monday.
"We are prepared to go back tomorrow and we're encouraged the talks are going to go on," union spokesman Bill Guy said. "There is some progress being made."
Almost three-quarters of the 52,000 students in the South Orange County district stayed home from the district's 56 campuses on Friday.
Nearly 90 percent of the district's 2,200 instructors went on strike Thursday and Friday. About 11 percent of teachers crossed picket lines to report for work Friday, down from 12 percent on Thursday, the district said. Schools are being staffed by substitute teachers.
The Capistrano Unified Education Association, which represents the district's teachers, walked out of classrooms when the school board slashed pay by 10.1 percent last month after breaking off months of negotiations.
It is the first teachers' strike in the county in a decade.
The district is trying to close a $34 million budget shortfall for the 2010-11 school year caused by a drop in state funding. The pay cuts will save $19.9 million.
The union has said it will accept the pay cut but only if it expires on June 30 of next year.
District spokeswoman Julie Hatchel said the atmosphere Friday was largely calm, though some picketers blocked and harassed substitutes and parents as they drove into several schools in the morning.