Naledi Manyoni threw the girl from the first floor into the arms of the neighbors waiting below as the smoke surrounded them, hoping they would grab the girl and keep her safe.
Violence and riots broke out in South Africa after the imprisonment last week of former President Jacob Zuma.
It is believed that 72 people were killed when looters ransacked shops, warehouses and other businesses and started fires.
Ms Manyoni and other residents were trapped by a fire that spread from the ground floor to the second floor and above of their apartment building in Durban’s central business district.
Ms Manyoni was caught on camera dropping her daughter into the crowd of neighbors to get the toddler out of harm’s way.
“I was scared, really scared, but there were people on the street,” she later told the BBC.
“People were screaming ‘throw it away, throw it away. The way I panicked, I trusted anyone to take my baby away from me because the place was on fire and there was smoke outside.
The toddler was not injured and the couple were reunited.
Ms Manyoni told Reuters: “After I threw it I held my head in shock, but they grabbed it.
“What was important for my daughter was to get out of this situation because my grandmother told me about it.
“She kept saying, ‘Mom, you threw me over there. “
Neighbors also rushed to get ladders to help others – including other children – escape, before firefighters arrived 20 minutes later.
Images on social media also showed a Durban hospital in flames.