Residents south-west of Brisbane have been told to prepare to leave their homes as firefighters and water-bombing aircraft battle to contain a grassfire on Sunday.

The Queensland Fire and Emergency Service issued an initial warning about 12.45pm for the fire in Mutdapilly, about 20 kilometres south-west of Ipswich, and released an update at 2.40pm.

A helicopter and Rural Fire Service trucks were battling the fire, but QFES warned "conditions could get worse".

"A large and fast-moving grass fire is burning near Mutdapilly Dip Road, Gimples Road, Mutdapilly Churchbank Weir Road and G Hines Road," a QFES statement said.