The fire is burning southwest of Lake Tahoe in the El Dorado National Forest. The fire is just 9% contained and threatens more than 17,000 acres surrounding the lake.
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Video shared with ABC7 shows thick smoke and a bright orange sun over Lake Tahoe.
The region remains submerged in gray smoke and hazy skies with drivers on the road barely seeing beyond the pavement in front of them.
WATCH LIVE: Track real-time temps, air quality in Bay Area
According to airnow.gov, the air quality index in South Lake Tahoe is at 349 and is considered "hazardous." The air quality index ranges from zero to 500.
The agency is urging residents to stay indoors.
Levels seen in the Sierra are starkly different from the Bay Area, with San Francisco measuring an air quality index of just 31.
The Caldor Fire is now the no. 1 priority for the United States' firefighting resources, CAL FIRE Director Thom Porter told the Associated Press.
"It is knocking on the door to the Lake Tahoe basin," he said. "We have all efforts in place to keep it out of the basin, but we do need to also be aware that is a possibility based on the way the fires have been burning."
More than 14,000 firefighters are tackling a dozen wildfires across the state. This includes the Dixie Fire, which is estimated at more 730,000 acres and now 41% contained. The Northern California wildfire has burned 1,262 structures, according to latest data from CAL FIRE.
Highway 50, one of two ways to access Lake Tahoe from the Bay Area, remains closed between Pollock Pines and Meyers, as of Tuesday, with no estimated time of reopening.
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Several beaches and resorts have also shut down due to the smoke and wildfire conditions, including Camp Richardson in South Lake Tahoe and Zephyr Cove Resort in Nevada, serving as as reminder to locals and tourists of the severity of the conditions.
You can track Bay Area air quality in real-time here here.
VIDEO: What's in wildfire smoke? How it can impact your health
What's in wildfire smoke? How it can impact your health
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