A woman allegedly taken hostage with her mother and two sons after the house they were in was set alight has been found by New South Wales police.

In a massive operation involving the dog squad and PolAir, tactical officers tracked down the 41-year-old woman and a 44-year-old man in bushland near Blaxlands Ridge, north-west of Sydney, shortly before midnight.

The man, who is believed to have been in a relationship with the woman, is in custody.

The women and children were allegedly taken from a 68-year-old man's home on Henry Parkes Way, Ootha, about five hours' drive from Blaxlands Ridge, on Tuesday morning.

Two men armed with a shotgun, a knife and an axe assaulted the 68-year-old at the property at about 5:00am and knocked him unconscious.

When he regained consciousness, the house had been destroyed by fire and the woman, her 71-year-old mother and the two boys, aged 13 and 14, were gone.

The grandmother and the boys were dropped off on a road on Sydney's north-west outskirts at about 7:15pm.

Two men, aged 23 and 29, were arrested near Sackville and taken to Windsor Police Station.

The man who was assaulted in the house was flown to Orange Base Hospital in a critical condition.

Chief Inspector David Cooper from Parkes Police said the house was "well alight" when emergency services arrived at the property after 11:00am.

"Police located a male a short distance away who appeared to have sustained some injuries as a result of an assault," he said.