The crash happened around 9 p.m. on Bear Street.
Police say it appears a white sedan and a red Mustang were racing on the street when the driver of the white sedan lost control and smashed into a tree.
The impact split the vehicle in half and caused it to burst into flames. Two people were found dead inside.
Police say the red Mustang stopped momentarily then fled the scene. Police are looking for surveillance video.
Local resident Debbie Lakin says she heard a loud bang outside.
"And then I looked out the back window and I see this fire. It was awful. The whole car was on fire."
The coroner's office is working to identify the two victims. Anyone with information is asked to call Santa Ana police.