The New South Wales Rural Fire Service has issued emergency warnings for fires burning near Lithgow and Springwood, in the Blue Mountains 100 km west of Sydney.
As 2000 firefighters battled fires to the north, west and south of Sydney, one of the worst blazes intensified in the Springwood area, where more than 300 homes have either been destroyed or damaged.
Properties are also under threat from the Lithgow blaze.
This fire has a front of 190km to Bilpin, and residents of Bell, Dargan, Berambing and Bilpin were been told to take shelter because it was too late to leave the area.
The Australian Defence Department is investigating whether an explosives training exercise on Wednesday started the fire near Lithgow, which has severely damaged the Zig Zag tourist railway.
The department issued a statement saying its personnel were conducting explosive ordnance training at the Marangaroo Training Area on the day the State Mine Fire started.
It is now investigating whether the two events are linked.
Defence says it will work with New South Wales fire authorities to investigate the incident once the fire has been extinguished.
Though cooler temperatures on Saturday assisted firefighters in other areas of the state, the sheer size of the fires worried authorities ahead of forecast hot and windy conditions on Sunday and Monday.
Hundreds of firefighters continued to work on containment lines, trying to prepared for the hot windy conditions forecasters warned were coming.
The Bureau of Meteorology's Dimitri Danchuk said the hot weather will continue until Wednesday with no chance of relief from a cool change.
The wildfires have claimed the life of a 63-year-old man who collapsed from a heart attack while defending his house at Lake Munmorah on the New South Wales central coast on Thursday.
Springwood resident Catherine Hubbard told AAP she made a terrifying escape from the bushfire that destroyed her home.
"The sun was totally blocked out and houses were burning down to the ground all around us," she said. Without running water, the neighbours used buckets and wet towels to douse embers, knowing the house was their only refuge.
Then came a change in the wind which cleared a path through the smoke. "It was a miracle, actually," Ms Hubbard said.
Firefighters have strengthened containment lines and tried to contain out of control blazes before worsening weather conditions on Sunday and Monday.
Thick smoke was blanketing the Illawarra and Southern Highlands area south of Sydney on Saturday as firefighters conducted back-burns to reduce the threat of a fire burning in the city's water catchment.