The balloon went down into the Pacific Ocean off Solana Beach, 25 miles north of San Diego, reports CBS affiliate KFMB-TV in San Diego.
All of those on board were rescued and no one suffered any serious injuries. Officials are investigating the cause of the crash.
"I'll never go on another balloon ride again," said passenger Robin Putnam, who took the sunset ride Monday with her boyfriend.
The balloon plunged into the Pacific off Fletcher Cove, on the coast of Solana Beach, after a sudden wind change.
"We had no indication there would be a significant weather change," said balloon crew chief Kyle Childers. "There was no indication that the wind was going to shift."
Passengers jumped out of the balloon's gondola and into the 54-degree water, where waiting lifeguards helped them into an inflatable rescue boat and a jet ski with an attached sled, said lifeguard Lt. Patrick Vergne.
One passenger suffered minor hypothermia and was taken to shore by helicopter. The others went by boat. No one required medical treatment, the lifeguard said.