A bushfire started by a masked gang who torched a car in NSW's Hunter Valley has reignited and is threatening homes.

Four men with their faces covered by bandannas dumped the Toyota Camry in bushland near the junction of Melbourne and Mulbring streets, Aberdare, on Thursday afternoon.

The car, which had no registration plates, bonnet or front doors, was torched soon after, sparking a bushfire that had to be water-bombed.

Rural Fire Service spokesman Joel Kursawe said the fire reignited on Friday afternoon and was threatening homes.

"As a result of this fire we've got Duffie Drive at Aberdare closed and a number of properties on Melbourne Street beginning to be impacted by fire," Mr Kurswe told Macquarie Radio Network.

The were no initial reports of homes being burnt.

Firefighters were trying to defend the homes and residents were warned to seek shelter until the danger passes.

Police are trying to trace the vehicle's origin and the four men who dumped the car on Thursday.

It remains unclear if the car was involved in a crime prior to the fire.

Witnesses are asked to call Crime Stoppers on 1800333000.

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