One of the cars in the California 200 race ploughed into the crowd at high speed after careering over a jump just half-an-hour after the start Saturday night, the Daily Mail reported.
The driver was thought to be among the dead. Other victims were crushed beneath the car.
The race was being held in Soggy Dry Lake Bed near the city of Lucerne Valley, 160 km northeast of Los Angeles.
David Conklin, a photographer who was covering the event, said the car had been among the first 20 off the line and had just gone over a jump called the 'rockpile'.
"I heard screaming and shouting", he said. "I saw one woman with a major head wound lying in a pool of blood. Someone else was crushed beneath the car."
Seven ambulances were sent to the scene, a fire official said. Tens of thousands go to watch the California 200, where dune buggy-style cars leap jumps and other obstacles around and off-road course. There is little or no barrier between the spectators and the cars as they career around the course.
Off-road racing is a format of racing where various classes of specially modified vehicles (including cars, motorcycles and buggies) compete in races through off-road environments.