About 40 homes are under threat as fires tear through grasslands and dense acacia scrubland off the Kings Highway east of Bungendore.
The NSW Rural Fire Service has also confirmed a home has been lost on Bogalara Road, near Jugiong, to the ACT's west, where a further 20 properties are under threat.
A very fast moving fire is burning out of control at Cobbler Road, impacting on Burrinjuck Dam Road. It pass Childowla Road shortly before 9pm, although residents were advised to keep watch on conditions.
The RFS said it was too late for residents to leave their homes. Residents should shelter where they are.
There were also reports of stock loss in the area.
On Hazeldell Road, NSW Rural Fire Service crews were racing from property to property warning residents of the impending danger. Choking golden-ash coloured smoke filled the air, as residents ran to their homes to grab what they could.
At least one home is believed to have been lost.
A helicopter filled and refilled from a dam on a property near the highway to battle the blaze, but what had started as a 300-metre fire front Sand Hill quickly escalated.
After the fire spotted into grasslands and raced along hill ridges on private roads off the highway, the Kings Highway was closed in both directions, with flames several metres high leaping into the air for hectares.
Crews from Braidwood, Bungendore and the ACT were brought in to fight the fire.
Kangaroos fled the flames, while several bewildered horses stood frozen in paddocks nearby.
Earlier in the day, NSW Rural Fire Service had warned that rumors that residents were being evacuated from Bungendore, Braidwood and Mount Campbell were false.
At the Queanbeyan Rural Fire Service brigade headquarters, a strike force comprising Fire and Rescue and Parks and Wildlife services, as well as SES and police, has been bunkered down since Tuesday morning monitoring fires across NSW and the ACT.
But they were dismayed at reports coming in early Tuesday afternoon that residents had been told by a radio station that authorities were evacuating the NSW towns of Bungendore and Braidwood.
Separate rumours were flying that Mount Campbell, in the Queanbeyan region, was also being evacuated.
Lake George zone RFS district manager Tim Carroll said social media could be fueling the rumors, and urged people to monitor "reputable" media and emergency service sources, including the Rural Fire Service website.
At the fire control centre in Queanbeyan, which is responsible for the Queanbeyan and Palerang council areas including the NSW towns of Braidwood and Bungendore, authorities monitored two fires near Bungendore during the first part of Tuesday.
The fires began on Saturday, sparked by lightning strikes, and had all but burnt out before again breaching containment lines and being brought under control on Tuesday.
But with winds reaching 105km/h at the 74ha fire at Mount Fairy, 12km north east of Bungendore, crews were taking no chances.
"On a day like today, the danger always is the fire will leap away bend the containment lines," Mr Carrroll said.
"We’ve had nearly two-and-a-half years of grass build up; the last two seasons were quite wet. So the grass growth has been the best we’ve seen in 30 years and in the last few weeks the grass has been curing rapidly ... the conditions are quite ripe for development and rapid spread of fires. Our concern really is for the grass fires this year."
The fire that was burning on Tuesday night was a new one.