No immediate injuries were reported after the 5:30 p.m. blast, the Anaheim Police Department said.
The Anaheim Fire Department did not respond to the incident, spokeswoman Maria Sabol said.
"As a precaution we have evacuated Toontown," police Sgt. Bob Dunn told The Times.
The dry ice appeared to have been placed in a plastic bottle that was left in a trash can, Dunn said.
He said it was unclear whether the explosion sent shrapnel into the air at Toontown, which is popular among families and their young children.
Officers at the scene were gathering statements and evidence. An Orange County Sheriff's Department bomb squad responded to assist in the investigation. No other details were immediately available.