The incident happened around 1:30 p.m. in the area of Walnut Avenue and 2nd Street.
Two workers were on the platform of the oil derrick, pulling up long rods from the ground as part of routine maintenance on an oil well next to it when the derrick started to buckle and lean.
"They were pulling the rods out of the well at the time, so they have cables that go from the very top of the derrick all the way down to the rods. As they pull them out in 30-foot sections, something happened where there's enough stress to pull it over and the derrick began to fail. We don't know if the rods got stuck or if it was just a failure of the structure," said Capt. Bob Culhane with the Huntington Beach Fire Department.
Some residents said they heard a loud cracking sound. A house and part of an apartment complex across the street were evacuated as a precaution.
The derrick was also leaning toward power lines nearby, so crews had to cut off power to about 25 homes.
People were allowed back to their residences by 8 p.m. Edison restored power to customers soon afterward.
The cause of the derrick failure was under investigation.