The blaze in the Jemez Mountains has grown to more than a square mile, forcing authorities to order evacuations.
The Bureau of Land Management said the Diego Fire jumped from 200 acres to 750 acres on Sunday pushing smoke toward Santa Fe and other parts of northern New Mexico.
Officials say strong winds caused the inferno seven miles southwest of Coyote to rapidly expand.
Federal officials say at least one permanent home and several seasonal homes were evacuated Sunday.
Several forest roads also have been closed.
Firefighters from around the state, including additional hotshot crews, are preparing to fight the fire.