Multimillion-dollar properties, some owned by Hollywood celebrities, were in the path of the blaze, which exploded late Monday, fanned by powerful winds and tinder-dry brush.
Firefighters were unable to get a foothold in the steep canyons that surround the tony enclave near Los Angeles, where towering flames were devouring hillsides, blanketing the air in choking smoke.
"We were completely surrounded," resident Alec Gellis told broadcaster KTLA.
"It was like 11 pm. We hear people screaming. I walk outside -- the sky is bright red.
"Within 45 minutes, it's coming down the hillside and then within an hour after that, we're fully surrounded, houses burning down on one side. Ridge is burning on the other side, mountains all around us.
"It got pretty scary at one point."
- Door-to-door response -
Law enforcement officers have ordered thousands of people to leave their homes, with many more told to be ready to flee if conditions worsen.
"There are approximately 20,000 affected citizens under evacuation orders and evacuation warnings," said Captain Jennifer Seeto of Los Angeles County Sheriff.
"Fire can be extremely unpredictable, and we highly encourage residents in the fire areas to be prepared. Have a plan and heed our evacuation warnings and orders."
Deputies had gone door-to-door urging people to get out as the flames began to spread on Monday night.
Malibu Mayor Doug Stewart said the fire had been "traumatic," but vowed that the city and its people would not be defeated.
"That's the way it is here in Malibu. It burns, it comes back, and we're resilient and strong."
Actor Dick Van Dyke, who celebrates his 99th birthday on Friday, posted on Facebook that he and his wife had fled their Malibu home.
"Arlene and I have safely evacuated with our animals except for (a cat that) escaped as we were leaving. We're praying he'll be OK and that our community... will survive these terrible fires," he wrote.
The city, which sits a short drive from Hollywood's major studios, has been home to some of the biggest names in show business, with present and former residents including Lady Gaga, Leonardo DiCaprio, Jennifer Aniston and Cher.
- Airdrops -
By Tuesday evening, the so-called Franklin Fire had swelled to more than 2,800 acres (1,150 hectares) and was still raging out of control, fanned by powerful seasonal winds that have led to forecasters hoisting a "red flag warning."
Los Angeles County fire chief Anthony Marrone said 1,500 firefighters were continuing to battle the flames, with the help of aircraft that were dumping thousands of gallons (litres) of water and retardant from the air.
Aerial reconnaissance showed an unconfirmed number of homes damaged and destroyed, he told reporters.
"The entire fire area remains under threat," he added.
Tens of thousands of people across southern California had their electricity cut off. Utilities frequently de-energize lines ahead of windy days to reduce the fire risk from downed power lines.
California Governor Gavin Newsom said the state had already secured a Fire Management Assistance Grant from the Federal Emergency Management Agency to assist with the response.
"Fire officials and first responders are working relentlessly to protect lives and property from the Franklin Fire," Newsom said in a statement.
Wildfires are a feature of life in California and other parts of the US West, and are often exacerbated at this time of year by Santa Ana winds, which blow dry desert air from the interior.
Human-caused climate change is known to increase the likelihood and the severity of fires, with evolving weather patterns leading to longer, hotter dry periods that desiccate vegetation.
Experts say decades of policies stressing a zero-tolerance approach to wildfires have also left much of the countryside overstocked with flammable material, so when blazes erupt they tend to be faster, hotter and more destructive.
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