The blaze is tearing through the Margaret River Region, a popular tourist destination renowned for its scenic beauty and wineries, reports Xinhua news agency.
The Department of Fire and Emergency Services (DFES) advised people to ensure their windows and doors were closed and to protect themselves by wearing long sleeves and trousers made from cotton or wool, as well as strong leather boots.
"If your home catches on fire and the conditions inside become unbearable, you need to get out and go to an area that has already been burnt," the DFES warned.
The fire started near the township of Dunsborough then spread to neighbouring coastal communities in Eagle Bay and Naturaliste.
An evacuation centre has now been set up in the township of West Busselton.
The fire is the latest to have hit the state this summer as two fires burned through hundreds of hectares of bushland and destroyed one home late last month.