The Lightner Creek Fire started late in the afternoon in the Lightner Creek area about three miles west of Durango.
People in about 170 homes were evacuated.
Evacuations will be lifted in stages, according to a post of La Plata County's Facebook page.
Durango Fire Rescue tweeted Thursday morning that there were no other structures now threatened and no injuries or fatalities reported.
Beginning at 8 p.m. Saturday, residents on County Road 207 north of the intersection of county roads 207 and 208 were allowed to return home. It's unclear if the wildfire spread to the home or if the house caught fire first and then spread to surrounding land, reports the Durango Herald.
The fire, which is about 100 miles north of Phoenix, triggered evacuations for thousands of residents in a half-dozen communities and came close to consuming the town of Mayer. Majority remained out of their homes.
One home has been destroyed.
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Now reunited with her possessions, the woman found she was still paying for the home she was forced from. If we need to take further action, we won't hesitate to do so'.
Officials said Thursday night the fire had grown to about 362 acres and was 20 percent contained.
Meanwhile, firefighters were carrying out a ground assault along the perimeter of the wildfire west of Durango.
- All recreation trails in the "Test Tracks" west of downtown Durango are closed including Hogsback, Leyden and Hidden Valley trails.
Hickenlooper's declaration of a disaster emergency means the state of Colorado is now in control of the firefighting effort and the National Guard can provide support if necessary.
The fire has impacted USPS delivery to almost 1,200 homes, including in the Rafter J, Junction Creek, Crestview, Rockridge subdivisions, and along County Roads 206, 207 and 208.
A shelter has been set up at the La Plata County Fairgrounds, and the American Red Cross is helping people who have been displaced.