Water officials say they've drained enough of the lake behind the dam so the emergency spillway would not be needed.
That spillway has also been fortified against future erosion.
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The region, north of Sacramento remains under an evacuation warning in the event the situation changes.
Residents began heading for home as soon as they heard the order had been lifted.
"It's so good to be back," Jenel Wilson said.
VIDEO: Oroville Dam emergency spillway at risk of failing
Wilson and her family were among the first to arrive back home in Oroville after the mandatory evacuation order was lifted.
"It felt like two weeks," Dale Russell said.
The extended family of seven and their dogs had stayed in a hotel for two nights, and were trying to find a longer-term solution at the evacuation center in Chico when they learned the order was about to be lifted.
So, they packed up and headed out, driving south from the evacuation center trying to get on the road ahead of the crowd.
As they arrived home the many cats that live in their mobile home park were there to greet them and enjoy a long-awaited meal.
Back at the Silver Dollar Fairgrounds in Chico more than 1,600 people had been trying to make the best of a difficult situation.
Many locals were there too, doing their best to make the evacuees feel comfortable and welcome.
"I can't just leave them here without anything to do," 10-year-old Dylan McBain told ABC 7. He brought his toys to share with the many children at the center who had none.
"When we got here, he said he didn't expect it to be like this, and he's really excited to look around and find children the right age for the toys he brought," Dylan's mom Amy said.
Mary Clegg handed out valentines to all the children. "They need to know they're loved."