About 1,800 people in North West River and Sheshatshiu were evacuated to Happy Valley-Goose Bay Saturday night.
Provincial fire duty officer Eric Young says the fire has since moved less than two kilometres towards the town.
However, he says any decision on the return of the evacuees would depend on the fire condition during the afternoon hours on Sunday.
The winds are also expected to shift this afternoon from north-west to south-east. If they do, Young says it should move the fire away from North West River and Sheshatshiu.
Dan Bedell, director of communications for the Atlantic branch of the Canadian Red Cross, says so far more than 800 evacuees have been processed at the Goose Bay reception centre.
He says those who chose not to leave their homes — 80 people in North West River and more than 50 in Sheshatshiu — are hoping water bombers and a shift in wind will keep the fire at bay.
The fire is burning less than 40 kilometres from the towns.
RCMP media liaison Cpl. Rick Mills said although there have been similar fires before, some much closer to the towns, there's a lot of anxiety and fear among displaced residents.
The department of natural resources is on hand to fight the fire, but Mills said the speed at which the fire was burning is concerning.
"We're sort of at the whim of mother nature right now," he said. "When you evacuate two whole communities it's a concern for everybody."
He said weather conditions aren't favourable and rain isn't expected until Thursday at the earliest.
Two water bombers are en route from Quebec to join three others in the firefighting efforts.
There have been several forest fires in the area during the past month, including one near North West River that has been burning out of control for nearly a week.