The fire started on Friday afternoon, and by yesterday evening it covered about 200 hectares.
Fire and Emergency New Zealand Incident Controller Mark Mawhinney this morning said that weather conditions were favourable overnight.
In an update this afternoon he said firefighting was continuing, and fire activity typically increased in the afternoon as wind increases, humidity levels drop and vegetation dried out.
"We have seven ground crews and six helicopters working hard to contain the fire to its current location in the 25 Mile Creek catchment. We are also identifying the resources we will need for tomorrow," Mawhinney said.
A reconnaissance flight at first light showed the fire had burnt an estimated 200ha of manuka and tussock grassland.
Mawhinney said most of the affected area was on Mt Crichton Station, and Fenz was working with the farmer to ensure stock was safe.
He said no structures were affected but some fences had been burnt. The fire had also reached an area managed by the Department of Conservation.
Winds were forecast to increase through the day with gusts up to 80kmh, so firefighting efforts were concentrating on containing the fire to the 25 Mile Creek catchment and creating a blacked-out perimeter, to reduce the risk of a breakout later in the day.
On Friday Fenz said the blaze, which at one stage had flames up to 30 metres high, forced the closure of the road between Queenstown and Glenorchy, had been brought under control.
But the fire was no longer in control yesterday afternoon, with smoke spreading across the Queenstown area and Fenz calling for back-up.
An update at 6pm yesterday from Fenz stated that the fire was about 200ha. Fenz said eight helicopters were battling the blaze, along with four ground crews.
Queenstown resident David Smith said the smoke had progressively been getting worse in his suburb and now he could barely see anything.
"There’s thick brown smoke coming over the back of Fern Hill, over the Ben Lomond summit," he said.
"You literally cannot see any mountains from the town, you can’t even see Walter Peak, if there’s this much smoke there’s definitely a big fire," Mr Smith said.
Fenz advised anyone impacted by the smoke or ashfall to close their doors and windows and call Healthline if they experience any health issues.
- Cas Saunders/additionally reported by RNZ