Malaysian officials have ordered schools closed and advised people to stay indoors or wear masks outside while a fog-like yellow haze envelopes the capital, Kuala Lumpur, and surrounding areas.
Government officials say they will begin seeding clouds in an attempt to cause rain and wash away the dust and smoke from the air.
The smoke from hundreds of out-of-control fires has drifted over to Malaysia from Indonesia's nearby Sumatra Island, which lies west of the Malaysian mainland.
The smoke, a mixture of ash, dust, carbon dioxide, and sulfur dioxide, has caused Malaysia's pollution index to rise above the 500 level, which is considered extremely hazardous to health, in two west coast towns.
Pollution levels in Kuala Lumpur have reached 321, with the tops of buildings disappearing in the yellow haze. An environment ministry statement said the air quality in the capital and several other cities was "unhealthy," reports VOA.
According to Reuters, in Teluk Nipah, a village near Port Klang, 70 km (44 miles) west of the capital, schools were closed and the haze hid objects more than 200 m (220 yards) distant.
"I have had fewer customers since last week," said Rani Talib, 33, the owner of a street hawker stall. Five customers eating dishes of chicken and rice all wore facemasks.
"My doctor gave me medical leave for two days," said Muzamil Olel, 32. "I have a sore throat and a headache."
Prime Minister Abdullah Ahmad Badawi declared an emergency for the areas of Kuala Selangor, a fishing and agricultural town, and Port Klang, the country's biggest port, after pollution reached "hazardous" levels there.
Both places are in Selangor, Malaysia's wealthiest and most-densely populated state, which surrounds the capital. Schools in Selangor would be closed for the rest of this week, state Chief Minister Khir Toyo said.