Knysna, a town of 77,000 people 500 kilometres (310 miles) east of Cape Town on South Africa's famed Garden Route, was worst hit as firefighters battled to quell 26 fires along the tourist trail.
High winds from a storm that claimed eight lives as it battered the Western Cape region have caused the blaze to spread rapidly.
The storm, which struck on Tuesday, has damaged buildings, felled trees, left 46,000 homes without electricity and caused travel chaos as flights and rail services were hit by gale-force winds and flooding.
Colin Deiner, the chief director of the Western Cape's fire service, told Voice of the Cape radio that at least 150 structures had been destroyed.
Local officials are now considering calling on the air force to help extinguish the blazes.
Western Cape premier Helen Zille told Kaya FM: "What we need is air power -- water-bombing, and helicopters to see which areas are affected and who needs to be evacuated."
Zille has been suspended from her party -- the main opposition Democratic Alliance -- over tweets apparently endorsing colonialism, but remains head of the regional government. She spent the night in Knysna to coordinate the response of emergency services to the crisis.
"The fire in Knysna is the largest and most destructive fire in a built up area in the Western Cape in recent memory with thousands displaced. It comes on the back of the worst storm seen in the Western Cape in at least thirty years," said Western Cape government spokesman James-Brent Styan in a statement. "To date between 8,000 and 10,000 Knysna inhabitants have been safely evacuated."
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