The incident happened just after 3 a.m. in the 5000 block of Wendover Road.
Detectives said a husband, wife and baby were home when a stranger barged into their house from the backyard. The mother dialed 911, and deputies rushed to the scene.
"She indicated that her husband was holding another male subject at gunpoint," said Orange County sheriff's Lt. Jeff Hallock. "We arrived and we found a male subject deceased from a gunshot wound."
Neighbors told Eyewitness News that they heard three gunshots and a lot of arguing. They said it sounded like one of the men arguing was drunk.
Investigators said the husband shot and killed the intruder, who was in his 20s, inside the house.
"Preliminary it appears based on talking to the male and the female that live in the residence, they don't know who this person is, and there is no relationship," said Hallock.
Deputies are calling this an isolated incident, but that isn't calming nerves in Yorba Linda, which was recently called one of the 20 safest cities in California by the FBI.
"This is completely shocking. This is a bedroom neighborhood. There's one way in. There's no reason to be here if you don't belong here," said Tom Perkins, a Yorba Linda resident.
"We walk around the neighborhood and where the incident happened, and we are shocked. They're brand new neighbors," said Ralph Spence, a Yorba Linda resident.
Neighbors said the family moved in about two months ago. After being interviewed by detectives, the homeowners were allowed to leave their house. Crime scene technicians searched the property for clues in the fog.
The big question now is whether or not the shooting was justified; that will be up to the district attorney's office to decide once it receives a completed investigation from the sheriff's department.