Three bodies - a 52-year-old male, a 43-year-old female and a 16-year-old male - were discovered when police and fire crews entered a granny flat at the rear of a property at Wiley Park in Sydney's southwest.
Authorities had been called to the home on Cornelia St at about 9.45pm on Wednesday, following reports of a fire.
The blaze reached the windows of the home before five fire trucks and 20 firefighters arrived, Fire and Rescue NSW officials said.
The cause of the fire remained unknown.
Neighbours told AAP the family, yet to be formally identified, had been living at the property for around 20 years.Â
The man's mother lives in the main home and survived the incident.
Crews forced their way through the property's burning exterior extinguishing flames as they went, including on scaffolding and gardening trellis.
Fire and Rescue NSW Commissioner Jeremy Fewtrell attended the scene on Thursday morning and promised an extensive investigation into the fire's cause.
''To lose three people in one fire like this is an absolute tragedy, it is devastating for the family of those people that have been lost last night," he said.
''This is a stark reminder of the dangers of home fires, particularly during the winter period.''
"We remind people the importance of having working smoke alarms, and that's a working smoke alarm that you've actually pressed the button and you've heard the noise."
Officers from Campsie Police Area Command have since established a crime scene and an investigation has begun, NSW Police said.
Police will work with the extended family to understand what led to the tragedy, Superintendent Sheridan Waldau said.
A report will be prepared for the coroner.