The collision was reported outside 691 O'Farrell Street near Hyde Street at 12:42 a.m., according to the fire department.
A collision between a taxi and a sedan sent the taxi into the fire hydrant, police and fire officials said. Water gushed 60 feet into the air.
No one was injured in the crash, police spokesman Officer Gordon Shyy said.
Some residents in the area lost water service. The San Francisco Public Utilities Commission responded and had service restored by 6 a.m., fire officials said.
The driver of the sedan was arrested on suspicion of DUI, Shyy said.