Dozens of people spotted Ford outside a shopping plaza in Bracebridge, a community in the province's cottage country, said resident Brody Lisle, 19, who posed with the mayor for a photo.
"I was so excited, I'm still shaking after seeing him," Lisle said in a phone interview. "He seemed a lot thinner and he was really happy and cheerful."
Ford said rehab was "really good," recalled Lisle, a long-time fan of the confessed crack-smoking mayor.
"He's done two weeks so far and he's got six more weeks left and he's feeling really good about himself, and health-wise, he's lost a few pounds."
It's not unusual to see celebrities in the region, but "none just walking about the town, normally," Lisle said. "They're normally in a car just driving by or whatever."
The Bracebridge Examiner first reported it received a tip Ford was in the area Friday afternoon and posted cellphone photos of the mayor posing with residents.
More photos of Ford posing with construction workers and staff at a dry cleaning store were posted later on Twitter.
Ford's lawyer Dennis Morris wouldn't confirm his client's whereabouts.
"I cannot tell you where the mayor is, unfortunately," Morris said. "The good news is, he's in rehab, and you know, it's always nice to leave him alone."
Ford announced late last month that he was seeking treatment for an alcohol problem, after new allegations of substance abuse surfaced in the media.
He told the Toronto Sun last week that rehab is "amazing" and compared it to football camp.
Friday marked a year since the Toronto Star and the U.S. website Gawker first reported seeing a video that appeared to show the mayor smoking crack cocaine.
Months later, Ford admitted to trying the drug while in one of his "drunken stupors" and to using drugs while in office.
That led council to strip him of most of his mayoral duties.
The mayor publicly swore off alcohol, saying he had cleaned up his act and was working out.
However, he was forced to admit drinking after another videotaped incident in which he used Jamaican swear words and slagged the city's chief of police.
The Globe and Mail said last month a drug dealer had shown two of its reporters video of Ford allegedly smoking what was said to be crack in the basement of his sister's home. The paper said it paid $10,000 for frame grabs showing Ford holding a copper pipe.
The Toronto Star also published details of "two nights of utter debauchery'' involving Ford at a Toronto nightclub.
Police began investigating Ford after a guns and gangs probe turned up wiretaps that allegedly captured conversations about the first "crack'' video.
A friend of Ford's has been charged with extortion related to attempts to retrieve the video.
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