The 30-hectare fire is on both sides of Old Sydney Road and Rowes Lane and is heading in a northerly direction towards Taylors Lane.
The CFA feared the blaze could have threatened lives and property and urged residents to put their bushfire survival plans into action.
But fire crews have gained the upper hand in slowing the spread of the blaze.
A watch-and-act advice remains in place for the area, where a suspicious fire broke out earlier this month.
The CFA has also issued a watch-and-act message for a number of communities near Ballarat as crews fight a grassfire at Creswick.
The small, fast-moving fire is in the Bald Hills Road area and is out of control.
The warning applies to the communities of Creswick, Sulky, Cabbage Tree, Cabbage Tree Flat and Bald Hills.
About 300 firefighters, meanwhile, continue to cut containment lines and back-burn along the edges of a 60,000 hectare fire in Victoria's east.
Weather conditions are favourable today but the fire is still active in remote forest country north of communities from Walhalla to Heyfield.
The fire destroyed 22 homes and killed an elderly man at Seaton on Friday when it travelled more than 60 kilometres through heavy forest in a matter of hours.
The incident controller at Heyfield, Ben Rankin, says communities will come under threat again when the wind swings to the north later this week.
"That's obviously the areas through Glenmaggie and around through Cowwarr Weir and then around over to Walhalla and that south eastern corner," he said.
"They are the ones that could be impacted and they're the ones we're putting the most of our effort into over the next few days."
Fire Services Commissioner Craig Lapsley says firefighters are strengthening containment lines on the eastern side of the blaze before the winds pick up on Thursday.
"The head of the fire at the Aberfeldy end is still critical to us and that's particularly to do with the water catchments," he said.
"The other is the area that will, if it's got north-westerly winds on this week, will push down on Maffra or the Maffra district so there's control lines being put in, but on the same token it's very clearly instructed by the incident controller to minimise the amount of fire put in around this."
Mr Rankin says the massive task of blacking out smouldering bush and creating new containment lines involves hundreds of firefighters, tankers and up to 15 bulldozers.
"It's sort of a process of making best use of the equipment and getting the strategic priority set and I guess making sure we're deploying those machines into the best place around the fire to get the best protection into the community," he said.
Meanwhile, Premier Ted Baillieu has backed a decision by local emergency services to maintain roadblocks in some bushfire-affected communities.
There are tensions in some towns with locals wanting to go back and inspect their homes and farmers wanting to attend to injured livestock.
Mr Baillieu says there are good reasons for the rules.
"Where there is danger, the agencies have the responsibility to make those judgments," he said.
"There are always problems around roadblocks and I know the relevant agencies have sought to resolve that as quickly as possible.
"One of the priorities for the agencies is to make sure they know where everybody is and that's why they've set up roadblocks in the first place so there aren't people in there that they don't know about."
He says special efforts are also being made to protect Melbourne's water supply from the bushfires.
"This fire started in Aberfeldy not far from the north end of the Thompson Dam," he said.
"The fire essentially burnt away from the Thompson catchment area."
Meetings are being held tonight and tomorrow for communities in eastern Victoria in the path of the state's biggest bushfire since Black Saturday.