Traffic and smoke choked the streets as people hurried to evacuate the city and the nearby US Air Force Academy.
Over 800 firefighters are battling fire over 15,324 acres (6,201 hectares) and is 5% contained. Evacuation orders are in place in much of the city.
Extreme fire warnings have been issued across several western US states.
At a press briefing on Wednesday morning, officials said crews had been working throughout the night to combat the flames, but it was still too dangerous to fully assess the damage.
However, they said weather conditions were not favorable.
Dry, hot temperatures are expected to continue across much of the US this week, with little chance of rain forecast to dampen the blazes.
“We do expect all of our lines to be challenged today,” incident commander Richard Harvey said, adding that erratic winds could make it harder for firefighters to make progress.
There have been no reports of injuries or people who are unaccounted for.
But the Memorial Health System said it has treated about 20 patients in the last 24 hours for respiratory-related illnesses, the Colorado Springs Gazette reported.
The Waldo Canyon Fire began on Saturday but quickly became the top national priority for firefighters as winds of up to 65 mph (104 km/h) sent the flames surging towards Colorado Springs.
“It was like looking at the worst movie set you could imagine,” Colorado Governor John Hickenlooper said after surveying the fire from the air on Tuesday.
“It’s almost surreal. You look at that, and it’s like nothing I’ve seen before.”
Heavy ash and smoke was billowing from the hillsides west of Colorado Springs and southbound traffic was temporarily closed on Interstate 25, which runs through the city.
Fleeing residents covered their faces with T-shirts to breathe through the smoke.
Meanwhile, Richard Brown, the Colorado Springs fire chief, described the blaze as a “firestorm of epic proportions”.
The city is Colorado’s second largest, situated just off the main north-south highway.
Elsewhere in Colorado, the High Park fire in the west of the state has been burning for weeks and remains just 45% contained, although fewer homes are under imminent threat.
Fires or fire warnings are also in place in Montana, Utah and Wyoming, just weeks into the annual wildfire season.
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