The New South Wales Rural Fire Service (RFS) said it was concerned that flying embers could spark new blazes ahead of the advancing fire front.
"We believe it might have been a deliberately lit fire", Inspector Mitch Newtown said on Saturday night.
The fire has burned almost 2,500 hectares of land, the RFS said.
Authorities said wind speeds were not as severe on Monday, making it easier to battle the blaze.
Firefighters have taken advantage of the conditions to do a back burn along Heathcote Road near Pleasure Point as well as in areas of the Holsworthy military base. The fire, which has already blackened 2,430 hectares, is now burning in a south-easterly direction towards Barden Ridge.
More than 70 fire appliances were stationed along roads dividing bushland from homes while helicopters were dumping water on the fire from above, SBS reported. (AAP) Thick smoke has blanketed most of Sydney over the weekend.
Fire and Rescue NSW commissioner Paul Baxter said it was "remarkable" there had been no major loss of property, and said community co-operation with authorities had been invaluable.
"We have had reports of impact on properties in west Menai and Barden Ridge but our crews at the moment are exclusively focused on fighting the fire", he told AAP in the evening.
"Residents in Illawong, Bangor and Picnic Point are experiencing ember attack and should continue to monitor for any new spot fires in the affected areas".
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By 5pm, some Menai residents were starting to relax.
Fire investigators were still working to determine the cause of the fire, but Mr Fitzsimmons said it was most likely deliberately lit.
Waterbombers were on the scene throughout the afternoon, however windy conditions are hampering firefighters's efforts.
NSW RFS Deputy Commissioner Rob Rogers said two giant aircraft, the DC10 Nancybird and the C130 Hercules "Thor" - normally used for aerial water bombing - were not available to help fight the Sydney fire.
More than 200 people visited an emergency centre at Moorebank Sports Club overnight, with local hotels offering accommodation to residents unable to return to their homes, ABC said.
"Still quite a hard day ahead (on Monday)", Rogers told the Nine Network.
"I think we've got a long way to go before we're out of the woods".
The RFS is now advising residents in Pleasure Point, Sandy Point, Alfords Point, Barden Ridge, Voyager Point, Illawong, Menai & Bangor to "remain vigilant throughout the day and keep themselves up to date by checking the NSW RFS website".