Charred remnants were all that remained of the house, which sat at the end of a cul-de-sac beside a busy highway. Debris littered the street.
Homes on either side of the leveled home also were damaged.
"One house is completely destroyed, just devastated. Both the other ones have major, major damage," Sacramento Metropolitan Fire District spokesman Christian Pebbles said.
Three of the five victims were in critical condition, fire and hospital officials said.
Officials believe the explosion was caused by a natural gas leak, prompting them to issue voluntary evacuations for about 40 nearby homes.
Pacific Gas & Electric Co. crews had been called to the street earlier in the day after someone reported smelling gas and were on scene when the home exploded.
A utility worker who was standing in the street at the time of the blast was injured and hospitalized with slight burns to the hand and cuts to the head, PG&E spokesman Brian Swanson said.
"Once the scene is safe, we'll look into what happened," he said.
He said the utility had shut off gas service in the area immediately surrounding the leveled house.
John Turner, who lives in a duplex about two blocks from the leveled home, said he heard "a big boom" shortly after 1:30 p.m.
"It sounded like something had fallen on my roof," he said. "I saw flames about as high as the house next door ... the smoke was billowing from that area."
Turner said he did not smell anything but saw two PG&E trucks near the explosion site when he walked out of his house.
The explosion sent three victims to the University of California, Davis medical complex in Sacramento. Hospital spokeswoman Phyllis Brown said they were in critical condition.
She identified the burn victims as Kim Dickson, in her mid-40s, and 17-year-old Sunny Dickson. Another victim, Ron Pana, is in his early 70s and suffered a severe abdominal injury, Brown said.
Officials could not immediately say where the Dicksons and Pana were when the home exploded.
Two others with lesser injuries were also hospitalized, as was a firefighter for an undetermined injury.
The cul-de-sac backs up to Highway 50, a major route between Sacramento and South Lake Tahoe that had heavy Christmas Eve traffic. Rancho Cordova is about 10 miles east of the state capital.