The flight took off at about 9 p.m. before landing a short time later on the other side of the Bay.
According the Federal Aviation Administration, the pilot received "some type of engine fire indication."
Southwest Airlines spokesman Brad Hawkins confirmed that Flight No. 1226, bound for Los Angeles International Airport, changed course when an indicator in the cockpit alerted the crew of a possible engine fire. The plane was carrying 108 passengers and five crewmembers.
"Our people handled the situation all by the book," Hawkins said, especially given that "the stakes are higher than ever with everyone trying to get home for the holidays."
Airline procedure dictated that the pilot make the emergency landing, although Hawkins said the plane could have safely completed the flight to Southern California.
"The captain shut down the number two engine and swung wide over the Bay to Oakland where, fortunately, we have a maintenance base," Hawkins said.
An investigation into the incident is ongoing, according to the FAA, but Hawkins said early information indicates that there was a real issue with the engine, "perhaps a small fire," and that the problem was not just with the engine sensor.
Because the fire was extinguished quickly, there was minimal damage to the plane, which Hawkins said will be able to resume flying.
San Francisco International Airport Duty Manager Joseph Walsh said the plane had been diverted to Oakland, and the FAA confirmed that the plane had landed safely at the Oakland airport and had taxied to a gate.
No injuries were reported.
Passengers eventually made it to Los Angeles Friday night on another Southwest Airlines flight, Hawkins said.
"The nature of the fact that it was Christmas Eve and because safety is our top priority, we're glad that we were able to accommodate both of those very important obligations," Hawkins said.