The body of an 80-year-old man was found after emergency services were called to the fire at Croydon, in Sydney's inner west, about 4am on Wednesday.
An elderly woman who left the home about three hours before the fire is assisting police, who are searching for another man aged in his 50s.
"It's very important to us that we locate that man as soon as we can ... because we believe he has information that will assist this investigation," Superintendent Christine McDonald told reporters.
Investigators believe he may be using public transport and travelling through the inner west, Circular Quay, Watsons Bay, and surrounding areas.
He was last seen in Leichhardt and is known to police.Â
Six trucks and almost two dozen firefighters attended the fire, entering the back of the property due to "intense" flames at the front of the single-story red-brick house.
Part of the roof collapsed as firefighters were inside, forcing them to retreat, Fire and Rescue NSW said.
The man's body was later found inside.
Footage taken after the blaze was extinguished shows a large portion of the roof caved in and firefighters examining other parts of the extensively damaged Irrara Street home.
The cause of the blaze is being investigated. Police believe it is suspicious.
The two men and the elderly woman are all believed to be related.
"We are speaking with family members back at the police station, and I know that they would be so devastated at what has occurred," Supt McDonald said.
"It really is tragic."
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