Extremely hot, dry and windy conditions have put southern states on the most extreme fire alert for several years.
Temperatures above 40 degrees Celsius are forecast across a wide area, as a heatwave continues to grip the region.
Crews are battling fires in Tasmania, South Australia, Victoria, Queensland and New South Wales.
Keep up to date with the latest emergency warnings
The worst of the fires so far is in Tasmania, where police are trying to confirm reports that one person has died in a bushfire that has isolated the Tasman Peninsula in the state's south east.
Fire authorities say at least 65 buildings have been destroyed in the small town of Dunalley.
It is understood they include a primary school, petrol station and the RSL.
The fire started yesterday at Forcett before moving to Dunalley, where resident Peter Crocker says he fled his home as the town was evacuated.
"To my knowledge, I know of at least two houses between myself and Dunalley that have been lost and I know of a couple of houses at Copping that have been destroyed by fire," he said.
"We're going to try and go back into the area and see what's there and see if we can salvage anything out of it or put any fires out, if the house is not already gone."
Fires rage across Tasmania
Smoke from a bushfire near Forcett towers over Park Beach outside Hobart, Tasmania, on January 4, 2013. (Twitter: Mic and Jo Giuliani)
Smoke from a bushfire rises over a Hobart neighbourhood on January 4, 2013. (Twitter: Botonaine)
Smoke rises from a bushfire in the Forcett/Copping area outside Hobart, Tasmania on January 4, 2013. (Rebecca White)
A helicopter dumps water on a bushfire in Epping Forest, in the Northern Midlands area of Tasmania, on January 4, 2013. (ABC News: Emily Bryan)
Smoke billows from the bushfire raging near Forcett in south east Tasmania, January 3, 2013. Read the story (Audience submitted: Ian Stewart)
A large plume of smoke rises from the bushfire raging at Richmond in south east Tasmania, January 3, 2013. Read the story (Audience submitted: Andrew Page)
A bushfire which began burning near Forcett yesterday is threatening communities around Copping. (ABC: Andrew Fisher)
The fire has cut access to the Tasman Peninsula, and a fleet of boats is heading for the area in an attempt to rescue thousands of stranded people.
The state's chief fire officer Mike Brown says crews are stretched to the limit.
"No matter just how much equipment, how many crews, how many helicopters, we just can't contain the fires," he said.
The fire is now heading south towards the smaller centres of Murdunna and Summers Bay.
Hundreds of residents will spend the night with friends and relatives, while others are being accommodated at community refuges at Ouse, New Norfolk, Sorrell and Nubeena.
Campers have been evacuated from beaches south of Bicheno, with the approach of a bushfire.
Crews are trying to contain the blaze, which is being fanned by strong winds.
A fire at Lake Repulse in the Central Highlands is also expected to threaten the areas of Ellendale and Meadowbank Lake in the next two hours.
The emergency warning for a bushfire at Epping Forest in the state's north has been downgraded and the blaze is now under control.
Meanwhile Hobart has hit 41.3 degrees -its highest temperature in 120 years of record keeping.
In South Australia, which has sweltered through temperatures above 45 degrees, there are concerns surrounding two fires.
A wind change has turned a fire at Finniss, about 80 kilometres south-east of Adelaide, towards already burnt ground.
The blaze is still burning out of control in the general direction of Finniss, but with much less ferocity than predicted.
State coordinator Mal Watts says people in the area still need to be following their bushfire survival plan.
He says people can get advice about what they should do from crews at the site.
"There's a lot of emergency service vehicles on scene and people can take their guidance from them. There's over 170 fire fighters and 30 fire fighting appliances on scene, so there are a lot of resources on site," he said.
There is also concern a fire at Sevenhill in the Clare Valley may jump control lines, and that could threaten Watervale, Leasingham and Auburn.
Fires are still causing concern in Victoria, where a total fire ban is in place.
A large bushfire north-west of Portland in the state's south-west is expected to grow overnight, having already burned through more than 200 hectares.
Meanwhile, firefighters are battling a smaller fast-moving bushfire burning out of control at Ensay, north of Lakes Entrance.
Victorians are being advised to access bushfire warning updates via the CFA's Twitter and Facebook accounts, as its website continues to experience problems.
Bushfire warning alerts can also be accessed via the Department of Sustainability and Environment's website.
Meanwhile, the Victorian weather bureau's Richard Carlyon says a cool change is starting to bring some relief to the state's south-west.
But he says the sweltering heat in the north is expected to continue until next week.
"The cool change will take a while to move through the south during this evening and overnight. But for the north of the state there's no real relief at all, forecast temperatures tomorrow are expected to be between 41 and 43 degrees," he said.
The chief executive of Melbourne's Metropolitan Fire Brigade, Nick Easy, says his crews are ready to step up and assist volunteers in regional areas over coming days.
"We regard ourselves as a partner with other emergency service organisations," he said.
"We cannot respond to what we see have been significant incidents in the past alone. We must work as a sector, we must work as a community, and we do work in partnership with the other agencies."
Acting Premier Peter Ryan says the state is much better prepared than it was for the Black Saturday fires nearly four years ago.
Bureau of Meteorology climate researcher Doctor Jeff Kepert says the Weather Bureau is also in a better position.
He says a new numerical weather prediction system is making a big difference to forecasting fire risk.
"Our ability to forecast is markedly better than it was on Black Saturday and has given us probably an extra day or so of reliable prediction for most of Australia," he said.
In Queensland, fire crews are on high alert with severe conditions covering much of the state west of the Great Dividing Range.
There are 13 blazes burning across the state, but no property is at risk.
In New South Wales, a bushfire just south of Forster on the state's mid-north coast has forced the closure of The Lakes Way.
The Rural Fire Service says no homes are under threat but the road is closed in both directions.
Crews will backburn two kilometres south of Forster tonight.
A grass fire at Baldry, west of Cumnock in the New South Wales central west, is being brought under control after burning 40 hectares.
Crews have also contained a fire near the John Hunter Hospital in Newcastle.
NSW Rural Fire Service assistant commissioner Rob Rogers says the next week could present a challenge.
"We're coming into the hottest part of summer, and there's no rain on the horizon at the moment," he said.
"Speaking to the bureau, they don't have any rain coming in the next week or so, just some isolated showers but no sustained rain.
Today's predicted temperatures
Adelaide - 44C
Melbourne - 41C
Hobart - 39C
Canberra - 37C
Sydney - 34C
"People need to make sure they're aware of the risk."
The Bureau of Meteorology says record average temperatures look set to be broken in the next few days, with temperatures to soar across much of central and south-eastern Australia.
Hobart today recorded its highest temperature in 120 years of record keeping.
The record maximum of 41.3 degrees was reached this afternoon and exceeds the pervious record of 40.8 which was set on January 4, 1976.
Countrywide, the average temperature on Wednesday was 39.21 degrees, just below the record of 40.7 set in December of 1972.
The hottest place so far has been Eucla, on the Western Australian border, where it reached 48.1 degrees yesterday afternoon, its hottest day on record and 22 degrees above the summer average.