Officials in the Blue Mountains west of Sydney say they may have to drop teams of firefighters ahead of a fire threatening the town of Katoomba.
The ABC reports one house has been destroyed and others damaged.
About 200 firefighters battled the blaze overnight and Inspector Ben Shepherd of the New South Wales rural fire service said 700 volunteers had been taking advantage of today's cooler weather to set up containment lines.
The Katoomba fire, which has continued to burn in rugged terrain on the valley floor, is one of 70 burning around New South Wales, including 37 that are uncontained.
The Beattie family, who have lived in the Blue Mountains, west of Sydney, for 16 years, had been evacuated four times in previous fires before yesterday's blaze destroyed their home.
Helene Beattie said she had been prepared for the threat, and packed important documents before evacuating. She said she would rebuild.
Rural Fire Service Commissioner Shane Fitzsimmons said firefighters were shocked by the fire's behaviour and the conditions.
"They spoke very much about firefighting conditions, fire behaviour, in this area the likes of which they haven't seen in 40 years," he said.