Shortly after midnight on Tuesday, residents of Baie-Johan-Beetz were awakened by police and told to pack their bags.
Police asked residents to seek safety in the town of Havre-Saint-Pierre, about an hour's drive west of their village.
The regional head of civil protection, Jacques Jacques Viger, said the fire has been burning for a week.
By Tuesday, he said the fire had come as near as 1.5 kilometres east of Baie-Johan-Beetz.
Geneviève Tremblay, who runs the Baie-Johan-Beetz outfitting company, said the fire moved very quickly and before they knew it, the fire had surrounded most of the town.
"The flames were going very very high," she said. "All our cabins in the woods are destroyed."
Tremblay said she is staying in a hotel in Havre-Saint-Pierre until the danger has passed.
It's not clear when residents will be able to return home. Later on Tuesday afternoon, Red Cross tweeted that it was preparing for an evacuation of the town of Havre-Saint-Pierre.
Crews with Quebec’s Quebec's forest fire protection agency (SOPFEU) are working to put out the flames.
The source of the fire has not been confirmed, but Viger said they do not suspect foul play.
The smoke has drifted as far away as the Magdalen Islands, according to Environment Canada.