The fire burned more than 740 acres of dense, hilly bush land, the Australian Broadcasting Corp. reported Wednesday.
Parts of Glen Dhu, Tanglewood and Collins Cap roads were cut off, and the Molesworth and Collinsvale primary schools were closed.
The Tasmanian Fire Service downgraded the fire's status from an emergency to a watch but warned homeowners needed to brace for worsening conditions.
The fire service expected it would take several days to contain the blaze.
Earlier spokesman Phil Douglas said the fire had reached the outskirts of several communities and had already destroyed some cars and buildings.