Newfoundland and Labrador's Natural Resources Department said the decision to allow residents to return to their homes in North West River and Sheshatshiu was based on the wind direction and the weather forecast.
"The biggest thing with all of this is the wind," said forest fire duty officer Eric Young. "If the winds stay south and southeast, we're fine."
About 1,800 people — most of whom live in the Innu community of Sheshatshiu — were told to leave their homes Saturday. Most were relocated to Happy Valley-Goose Bay, an hour's drive south.
By Monday morning, the fire had advanced to within 28 kilometres northwest of the towns.
However, the fire started burning back on itself when the winds shifted, blowing from the south and southeast.
"That's been a great help to us," Young said from the Regional Forest Fire Control Centre in Corner Brook.
"It pushed the fire away from the communities ... and it's kind of back-burned over itself and the fire is now headed in a northerly direction. We were pretty successful at extinguishing some of the hot spots and controlling the boundary of the southern part of the fire."
Five water bombers, seven helicopters and a ground crew of about 40 were battling the blaze Monday.
Meanwhile, the forecast was calling for a favourable southeast wind on Tuesday and rain on Wednesday and Thursday.
The fire is about six kilometres wide and 20 kilometres long, which is why both communities remain under an evacuation alert, said RCMP Cpl. Rick Mills.
"The fire is still a potential danger and a risk to the communities," he said. "The Department of Natural Resources wants people to know we're not out of the woods yet. Should the wind change, there could be another evacuation order."
The forest fire centre is monitoring close to 40 fires across Labrador, including one about 10 kilometres from Charlottetown, which is along Labrador's southern coast.
Not everyone followed the evacuation order on the weekend. Police say at least 150 people remained in Sheshatshiu and about 70 were still in North West River. The communities are separated by the small river that links Grand Lake with much larger Lake Melville.