The witnesses heard a loud crack Thursday afternoon as the yellow bus smashed into trees on a grassy hill along East Nohl Ranch Road by the Anaheim Hills Golf Course.
Two of the students were critically injured and three others had minor injuries, according to the California Highway Patrol.
The injuries to the students did not appear to be life-threatening, fire officials said.
The driver also had critical injuries but was conscious. The six remaining students were released at the scene to family or friends, the CHP said.
Anaheim Hills resident Claudia Matten also said he head a loud crack as she walked along the roadway and saw the bus come to a stop amid the trees.
Some children escaped out an emergency door on the right side of the vehicle, Matten said. She and several other witnesses helped the students as they exited the bus.