The crash happened around 6:20 p.m. The tail of the aircraft could be seen protruding from the structure.
"We heard a boom, and then we heard another one - there were three," said Rachel Pollack, a witness.
Firefighters said the hangar was collapsing as they arrived.
"When we got there, the whole hangar that the plane went into was completely involved and full of flames," said Santa Monica Fire Department Capt. John Nevandro. "This was an unsurvivable crash. It went into the hangar. We cannot get into the hangar. The hangar collapsed."
One witness said he watched the twin-engine Cessna Citation touch down just before 6:30 p.m.
"I watched It land; it was a perfectly normal landing," said Charles Thomson. "It wasn't an emergency landing; it was just a landing, and the tire popped afterwards."
Neighborhood residents heard the collision, ran outside and saw the smoke.
"It was very, very terrifying. It was very sad to see so much smoke, and the building collapsed and the loud boom. You put it all together and it's scary," said Alyssa Laing.
The Barbosa family said they were watching a movie when the crash happened. Angelica Barbosa believes this is the 4th or 5th accident at Santa Monica Airport in the five years they've lived on Pier Avenue.
"We ran out to see what was going on, and we could see the smoke," said Barbosa. "There was chaos everywhere - neighbors running around, sirens everywhere and just a lot of very black smoke and a lot of scared people."
"At first I thought it was part of the movie. Then when I went outside, I saw a bunch of smoke and I'm like, 'Mom, Dad, we should go outside to the front yard like all the other neighbors,'" said Alex Barbosa.
Officials said the eight-passenger jet departed from Hailey, Idaho, and is registered to a creative real estate company at a Malibu address. There's no word yet on how many people were on board.
National Transportation Safety Board investigators arrived on the scene, but they said the hangar was too unstable to enter on Sunday. The NTSB said it probably wouldn't be able to access the aircraft and confirm any information about fatalities until Monday.