The fire's southern edge is about five miles from Flagstaff, and an estimated 1,000 residents of the mountain town of about 60,000 may be allowed to return home Wednesday.
But efforts to fight the blaze will likely continue for at least two weeks, incident commander Dugger Hughes said at a news conference Tuesday evening.
"It's going to be a long haul," he said. "But it's looking good."
Massive clouds of smoke continued to choke Flagstaff on Tuesday as 800 firefighters battled to keep the fire from heading toward the town.
By late Tuesday afternoon, authorities announced that the so-called Schultz fire was 20 percent contained. Crews continued to work on containment lines on the south and north sides where the fire is most active, said fire spokeswoman Erin Phelps.
The smoke over parts of Flagstaff was the result of burnout operations to rob the fire of fuel and new growth on the south and north sides.
Two heavy air tankers were used on the blaze Tuesday, said fire spokesman Eric Neitzel. The tankers, part of 19 under contract through the U.S. Forest Service to fight fires across the country, are capable of carrying more than 2,000 gallons of fire retardant used to slow the spread of fire.
Strong winds had quickly fanned the fire that broke out Sunday. Authorities said it was started by an abandoned campfire. No major injuries have been reported and no structures have burned.
Conditions are dry, despite record amounts of snowfall in the area last winter. Authorities said campfires are to blame for the Schultz fire and another smaller one in southeast Flagstaff. Campfires will be prohibited in three Arizona forests starting Wednesday.
The fire in southeast Flagstaff was 80 percent contained Thursday afternoon. A third fire 11 miles northeast of Williams was expected to be fully contained Wednesday.
Arizona Gov. Jan Brewer toured the fire area Tuesday.
"You're in great hands," Brewer said at the news conference. "I will assure you that the state of Arizona will continue monitoring it."
Earlier in the day, Brewer said she spoke with President Barack Obama, who assured her of the federal government's continued support in firefighting efforts, according to a White House statement. Two requests from the state for federal fire management assistance funds have been granted.
Residents who showed up at a shelter at lunchtime were still waiting to hear how long they had to be out of their homes. Tracey Simpson, who has stayed in hotels the past two nights, learned she would have to find a room for yet another night.
Simpson and her husband moved to Flagstaff from Pennsylvania five weeks ago and were forced to evacuate on Sunday from the home they rent in the fire area.
She has no assurance of recovering any possessions if they were lost to the flames.
"We were unprepared," Simpson said. "I forgot to get renter's insurance."
Staying in hotels is getting expensive, she said, and they can't bring their two dogs along to sleep at a shelter.
"I have never experienced anything like this," Simpson said. "We just want to go home."
Percy Piestewa said her family has not been allowed to return to their home since Sunday, but she's not worried.
"You just have to leave everything up to God."
Piestewa said the family was staying with friends and attending briefings at the Red Cross shelter. She is the mother of Army Spc. Lori Piestewa, who was killed in Iraq in 2003.
In Colorado, firefighters battled a 700-acre wildfire Tuesday west of Canon City near the scenic Royal Gorge Bridge. The blaze forced an unknown number of residents from their homes and destroyed several structures. It wasn't immediately known whether any of those were homes.
The suspension bridge that crosses the 1,200-foot deep gorge over the Arkansas River remained off limits. River rafting through the gorge has also been shut down because of the fire.