The fire burned 33,700 acres (13,600 hectares) throughout the foothills of the Sierra Nevada, impinging on the communities of Lake Wildwood, Rough and Ready, and Smartsville before officials declared it fully contained on September 16.

The 49er Fire highlighted the rapid pace and the potential consequences of development in the wildland-urban interface (WUI), and was sometimes called the 'wildfire of the 1990s' by state officials in an effort to raise awareness of the growing challenges of firefighting in areas where human structures intermingle with wildland fuels.

This wildland–urban interface zone, located northeast of Sacramento and at the time one of the fastest-growing such areas in California, contained many properties that were difficult to protect from wildfires.

Many homes lay at the end of narrow and unmarked roads, on or near steep hillsides, and adjacent to heavy vegetation;[2] according to the Nevada Fire Safe Council, 80 percent of the destroyed residences lacked the required brush clearance.

This was partly because the drought greatly increased tree mortality in forests, destroying at least 18 billion board feet of timber between its onset and cessation.

[8] On the morning of September 11, 1988, at approximately 9:00 a.m. PDT, the 49er Fire was accidentally begun by Gary Wayne Parris, a homeless man suffering from undiagnosed schizophrenia.

Many houses burned despite the best efforts of residents armed with garden hoses, attempting to beat back encroaching 200-foot crown fires.

[14][16] Elsewhere, a dozer was engulfed in flames, forcing its operator to seek refuge beneath it while wrapping himself in an asbestos fire blanket.

[17] The fire moved down Deer Creek Canyon towards Rough and Ready,[19] and at 3:15 p.m., Nevada County Sheriff deputies ordered the complete evacuation of the town.

[14] Lake Wildwood residents had briefly been allowed to return; they re-evacuated, joining the communities of Penn Valley and Yuba County's Smartsville.

Winds calmed down to 5–7 miles per hour (8.0–11.3 km/h), temperatures dropped by ten degrees Fahrenheit, and relative humidity levels doubled.

[21] An inversion layer kept smoke trapped near the surface, grounding air tankers and limiting visibility in Rough and Ready to under three miles per hour (4.8 km/h), but also quelling fire activity.

[22] Evacuation orders for multiple communities, including Rough and Ready and Penn Valley,[16] were lifted, and Highways 20 and 49 reopened.

The fire still remained active: it threatened the Grass Valley Group industrial complex, moved into the Jones Bar area near the Yuba River, and burned into grasslands around Beale Air Force Base before it was extinguished four miles (6.4 km) from the main part of the base, but no structures were lost after the night of September 12.

[26] In total, more than 8,000 people had been forced to evacuate in the communities of Rough and Ready, Cement Hill, Lake Wildwood, and Penn Valley.

[1][33] As the fire burned, Governor of California George Deukmejian declared a state of emergency in Nevada and Yuba counties.

[20] In 1989, the California State Assembly passed AB 3, a disaster relief bill to provide money to supplement federal funds for individual and family claims.

[37] Parris was seen absconding the shack at the scene of the ignition by Nevada County Sheriff's Department deputies on their way to respond to the fire.

[38] A member of the Sheriff's Department said he later found Parris 12 miles (19 km) from the ignition point after witnesses advised him to look for a man with a bucket.

[32] Parris originally faced a misdemeanor charge for the negligent burning, but after meeting with Cal Fire officials, Nevada County district attorney John Darlington changed the charges to a felony even as news reports raised doubts about Parris's possible mental health issues and level of responsibility for his actions.

Testifying in his own defense, Parris admitted to hearing voices, among other phenomena, and said that the winds that had blown the burning paper into the brush had been the work of supernatural forces.

In 1998, Sutter County Judge Robert Damron declared that Parris remained a threat, sentencing him to two more years at Atascadero.