The bus had been traveling north on Highway 101 at around 6.40am when it flipped and landed across the central crash barrier near San Jose, the San Jose Fire Department said.
Two people were pronounced dead at the scene while another eight were taken to hospital including the driver who suffered minor injuries, according to the California Highway Patrol.
A passenger, who spoke to KTVU anonymously, accused the bus driver of falling asleep and said the vehicle was weaving back and forth before the accident.
He said: 'The bus driver fell asleep, he really did. About five miles ago he pulled over to catch himself but he did not have enough energy to continue.'
Fire Capt. Christopher Salcido said that, among the injured, five people suffered moderate wounds while another 13 had minor injuries.
Authorities said the cause of the accident was still under investigation, but confirmed that no other vehicles were involved.
The bus was carrying 20 people, including the driver, at the time of the crash and had been heading from Los Angeles to Oakland with planned stops in San Jose and San Francisco.
The accident snarled a morning commute already slowed by rain, backing up northbound Highway 101 for several miles.
Highway patrol officers have estimated that it will take until around 4pm to reopen all the lanes.
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