Strong winds overnight brought smoke from fires inland, pushing the air quality in Australia's largest city to beyond "hazardous" levels at times.
On social media, locals have described hazy skies and the stench of smoke in their homes.
About five million people live in the state capital of New South Wales, which has been affected for weeks by fires.
Six people have died in bushfires in the state's north since October.
· Is climate change to blame for Australia's fires?
· Rugby star's 'appalling' bushfire link draws anger
· Why extreme wildfires make their own storms
· How do you fight extreme wildfires?
Sydney residents were warned about severe fire danger on Tuesday, as temperatures soared to 37C (98.6F) in the city's west.
Parts of the city recorded air pollution levels at eight times higher than the national benchmark.
Health officials advised people to stay indoors and avoid physical activity. They also shared first aid guides on how to help asthma sufferers and others with respiratory problems.
"The smoke is likely to hang around for the next few days," warned the New South Wales Rural Fire Service.
You could smell it the moment you woke up. At first I hoped that it was just my housemates smoking inside again - but I knew deep down it was another fire. The sky was a burnt grey.
The first thing I checked on my phone wasn't Instagram, or emails, but the app I downloaded last week which shows where the bushfires are.
Thankfully, no new fronts had sprung up overnight. But it's hard to predict these days - the blazes are so volatile and can flare up with a change in wind.
I cut short my walk to work to get the bus instead. People were still coughing and spluttering on board. I made a mental note to buy a face mask - something I've never needed before in Sydney.
Quito - Ecuador
Showroom: Av. América N17-207 and Santiago
Miguel de Santiago Building Of. 5
Telefax: 02 222-9444 / Cel: 0987178263
Office:: Salinas N17-246 and Santiago, Jácome Building Of. 101
Email: info@ecuatepi.com
Panamá
East 53RD Street, Marbella, MMG Tower, 2ND Floor