Officials said the Power Dam fire was up to 65 acres and had jumped Highway 395.
So far, firefighters responded from the Ruhenstroth Volunteer Fire Department and Station 7 in the Ranchos.
Douglas Sheriff's Sgt. Tom Mezzetta said the fire was moving in an easterly direction propelled by 15 mph winds.
He said a voluntary evacuation was under way and that Ruhenstroth residents were allowed in the area to pick up pets, medication and other necessities, then urged to leave.
"The Red Cross is standing by if necessary to set up facilities for evacuation," Mezzetta said.
