The network of tents, bunkers and even a tree-house, known as "the Jungle", was once home to more than 200 people.
Residents of the camp in San Jose, California, were given a 72-hour notice to vacate by early Thursday morning.
Officials believed about 50 people were still living in the camp. Social services are helping find residents alternative accommodation.
There have been no reports of violence or people refusing to leave.
City leaders said the camp's closure was essential as it had become unsafe and unsanitary.
Silicon Valley is one of the wealthiest regions in the US, home to tech giants like Apple and Google.
But it also has some of the highest homelessness rates in the country, with an estimated 5,000 sleeping on the streets each night in San Jose.
The booming tech industry has pushed up housing costs, pricing people out of the market.
Work clearing the camp is expected to be finished by 19 December.
US police have begun clearing what is thought to be the country's largest homeless encampment, in Silicon Valley.