A watch and act warning has been cancelled for residents in two towns south of Toowoomba as authorities advise homes are no longer under threat.

A Queensland Fire and Emergency Service spokeswoman said one shed was damaged in the bushfire but couldn't confirm reports a house caught fire in the Hirstglen-West Haldon area.

Water bombers fight Toowoomba bushfire. Credit:7NewsQueensland/Twitter

The fire was still burning on near Gatton-Clifton Road about 7pm and firefighters were expected to stay overnight to monitor its progress.

"A large volume of smoke will continue to be visible and residents are advised to shut windows and doors and keep medications close by," QFES said.