The two-acre blaze was first reported around 12:20 p.m. near Via Del Agua and Via Catalina.
Orange County Fire Authority Capt. Larry Kurtz said the blaze was burning near the SR-73 toll road, which was acting as a buffer between the flames and homes.
Kurtz said homes were threatened at one point.
"It was terrifying because I called my neighbor and she said they're evacuating and you can't get in," said Laguna Niguel resident Sharill Hanns.
Resident Ronnie Lott's patio faces the area where the flames took out. His dog, he said, warned him about the fire as it was getting closer to his home.
"Just kind of came out because he started barking and saw it was just literally 20 feet in front of me, so it was pretty crazy," Lott said.
By the late afternoon, the flames appeared to be mostly out, and firefighters were focused on mop-up operations and dousing hot spots.