Some 300 people were evacuated from villages and camp sites as the fire in Yeste in southeastern Spain burnt more than 1,000 hectares (nearly 4 square miles) in two days, Ana Cuevas, a spokeswoman for the regional government of Castilla-La Mancha, told AFP.
She added that the blaze had still not come under control after firefighters worked all night to try and stop its advance.
The fire, which started on Thursday morning, comes as parts of southern Europe experience a scorching summer, leaving forests and bushland highly vulnerable to blazes.
Neighbouring France battled huge fires near beaches popular with tourists on the Cote d'Azur, forcing the evacuation of 10,000 people.
These came under control on Thursday although authorities remain on high alert.
In Portugal, meanwhile, fires have raged across large areas of tinder-dry forest, cutting off roads in the centre of the country and forcing thousands to flee just a month after blazes that left more than 60 people dead.