Mayor Terry Ritchie of Perth-Andover said people living near the Tobique First Nation left their homes overnight because of a nearby blaze.
"It raged up," he said in an interview. "You could see it really burning like the whole mountain was on fire."
Ritchie said the fire appeared to be running out of fuel by Thursday morning. He was hopeful rain in the forecast would take care of the rest and allow residents to return to their homes.
"Mostly, it burned itself out. Can't say for sure because it could flare up again."
Schools in Perth-Andover, about 175 kilometres northwest of Fredericton, were closed for the day as a precaution. Ritchie said residents in nearby Craig Flats were also been warned to prepare for an evacuation if necessary.
"We sent police around to some of the outlying communities," he said.
"We knocked on doors until 3:30 in the morning so that took a lot of understanding from people."
A health advisory was issued for residents with breathing difficulties, but Ritchie said the wind was redirecting most of the smoke from the fire away from the community.
The Red Cross said two reception centres were available to provide support for about 300 people who were forced from their homes. Two people spent the night in a centre Wednesday, but most evacuees were staying with loved ones or in area motels.
The organization was encouraging all evacuees to register at the centre, regardless if they have a place to stay.
"That gives authorities a clearer picture of how many people are impacted, where they are staying and how they can be contacted with updates or emergency information," it said in a news release.
Despite dry conditions and a provincewide ban on burning, the provincial government said people are continuing to set fires that end up getting out of control.
One man-made fire destroyed two mobile homes west of Moncton earlier in the week.
The Natural Resources Department's website said more than 280 fires spanning more than 682 hectares have already been reported this year. There were 222 fires reported for all of 2012, spanning more than 309 hectares.
Natural Resources Minister Bruce Northrup said Wednesday that people are endangering the lives of others with their careless actions.
Roland Hache, a Liberal member of the legislature, said the department needs to improve its awareness programs in advance of the fire season.