The brush fire, which officials said was caused by fireworks, grew about 100 acres overnight.
It was then estimated at 3,800 acres by Sunday afternoon and was 35 percent contained.
Cal Fire said investigators determined the cause was fireworks. There was no word yet on whether any arrests have been made or suspects identified.
The neighborhoods on Live Oak Canyon Road between San Timoteo Road and the 10 Freeway were under mandatory evacuation orders until the afternoon, officials said. About 100 homes were affected on the side of Riverside County and nine others were affected in Redlands.
The Palmer Fire was reported at 1:33 p.m. Saturday initially in the area of West Oak Valley Parkway and Palmer Avenue in Beaumont. It was at first estimated at 50 acres, but quickly grew to more than 3,000 acres among the dry, hot conditions.
At least 275 firefighters were battling the blaze.