A man has been badly injured in a big explosion at a suspected clandestine drug laboratory in south-western Sydney.

The 32-year-old has severe burns and is in an induced coma in the Royal North Shore Hospital.

He is under police guard.

Several neighbouring properties on Brinsmead Avenue at Middleton Grange were evacuated because of concerns about toxic fumes from the explosion, but residents have returned home.

Acting Police Inspector Stuart Cadden says officers uncovered evidence of illegal drug manufacturing within the burnt-out ruins of a garage at the property.

"At this stage it appears that a possible laboratory has been operating in the garage area," he said.

"Police are making further inquiries today with specialist police and units to determine what's going on there."

Anyone with information can contact police via Crime Stoppers on 1800 333 000.