The region's entire fleet of available firefighting trucks swarmed a neighbourhood in Kanahooka on Wednesday evening under the threat of huge property losses.
Some residents took up hoses and others fled as the fire, in bone dry scrub directly ringed by about 30 homes, kicked off just before 5pm.
Lakeside Memorial Park was closed to the general public as it became a staging area for more than 20 RFS and NSW firefighting trucks and a suite of police cars.
In the end, the blaze claimed a single hectare of scrubland before it was considered extinguished, about 7.15pm, however RFS volunteers will remain in the neighbourhood through the night to guard against flare-ups.
Neighbours and firefighters kept property losses limited to five cars, a boat, a tractor and a woodchipper at a property off Rondanella Drive.
Residents also used garden hoses to protect property on Saltwater Circuit, where the fire threatened property including a dedicated disability home.
Fire and Rescue NSW's duty commander Illawarra Chad Wallace said it was an hour before the direct threat to property had passed.
"We got here pretty quick, but there were people fleeing down the streets," he said.
"That first hour was pretty critical.
"Initially the fire was burning in almost two directions - two crescents. There were so many houses on the fringe.
"We try and resource maybe one truck per every two or three houses which straight away, just pure maths, will mean probably 20 trucks to that sort of geographical area.
"We pretty much had every fire truck in the Illawarra here this afternoon," he said on Wednesday.
"We were able to, I suppose, pinch the fire in two spots to stop it going any further."
Rondanella Drive sisters Sharleece and Tahlia Coan watched their dad Mick hurdle a fence to protect an absent neighbour's home with a garden hose, shortly before firefighters arrived.
Pets at the property, including some baby goats, were spared.
Mick was one of three residents later requiring treatment for smoke inhalation.
"We saw the smoke, then all of a sudden it just went black and when we come down it was speeding along that hill," he told the Mercury.
"It was 34 degrees out here and then the wind picked up out of nowhere.
"It just got out of control when it got to those cars."
The fire came dangerously close to a home on Saltwater Circuit, but residents grabbed garden hoses to help stop the flames.
"My wife said 'there's a fire, there's a fire'," Saltwater Circuit resident Andrew Edwards told the Mercury.
He raced outside his home to see a fast-moving grass fire tearing towards his neighbour's house, which is a dedicated disability home.
Mr Edwards and another neighbour, Matt Whiteside, grabbed garden hoses and began wetting down the house and spraying water on the flames.
"You do what you can, but it was like fighting a losing battle," Mr Edwards said.
Insp Wallace said the first fire crews to arrive had to navigate smoke, flames as well as people who had taken to the streets in confusion or panic.
"That's human nature, but it just shows you why everyone needs to have their home fire evacuation plans," he said.
"This is a residential area in Kanahooka where people probably think, 'never in a million years ...' - but they needed that. Today some people needed it."
NSW Police said in a statement: "Officers attached to Lake Illawarra Police District established a crime scene and have commenced inquiries into the circumstances surrounding the fire".