As of the 2000 census, there were 10,350 people, 4,986 households, and 2,612 families residing in Morro Bay. The population density was 2,006.9 people per square mile (774.4/km²). There were 6,251 housing units at an average density of 1,212.1/sq mi (467.7/km²). The racial makeup of the city was 89.44% White, 0.68% African American, 0.95% Native American, 1.81% Asian, 0.09% Pacific Islander, 4.10% from other races, and 2.95% from two or more races. Hispanic or Latino of any race were 11.43% of the population.
There were 4,986 households out of which 16.7% had children under the age of 18 living with them, 40.5% were married couples living together, 8.3% had a female householder with no husband present, and 47.6% were non-families. 38.0% of all households were made up of individuals and 16.4% had someone living alone who was 65 years of age or older. The average household size was 2.04 and the average family size was 2.65.
In the city the population was spread out with 15.1% under the age of 18, 8.4% from 18 to 24, 25.4% from 25 to 44, 26.8% from 45 to 64, and 24.2% who were 65 years of age or older. The median age was 46 years. For every 100 females there were 91.3 males. For every 100 females age 18 and over, there were 89.8 males.
The median income for a household in the city was $34,379, and the median income for a family was $43,508. Males had a median income of $31,073 versus $25,576 for females. The per capita income for the city was $21,687. About 8.1% of families and 13.0% of the population were below the poverty line, including 16.9% of those under age 18 and 5.8% of those age 65 or over.
The summer population of Morro Bay, counting seasonal residents, tourists, and visitors, often doubles and may climb as high as 50,000 at its height in early July. Many of these are from the California Central Valley and Fresno, driving out to the Pacific to vacation or simply to escape the heat. Others come from Los Angeles and the Bay Area seeking the small town experience.