Losses to life and property from unplanned fires (wildfires) are forecast to increase because of population growth in periurban areas and climate change. In response, there have been moves to increase fuel reduction—clearing, prescribed burning, biomass removal and grazing—to afford greater protection to peri-urban communities in fire-prone regions. But how effective are these measures? Severe wildfires in southern Australia in 2009 presented a rare opportunity to address this question empirically. We predicted that modifying several fuels could theoretically reduce house loss by 76%–97%, which would translate to considerably fewer wildfire-related deaths. However, maximum levels of fuel reduction are unlikely to be feasible at every house for logistical and environmental reasons. Significant fuel variables in a logistic regression model we selected to predict house loss were (in order of decreasing effect): (1) the cover of trees and shrubs within 40 m of houses, (2) whether trees and shrubs within 40 m of houses was predominantly remnant or planted, (3) the upwind distance from houses to groups of trees or shrubs, (4) the upwind distance from houses to public forested land (irrespective of whether it was managed for nature conservation or logging), (5) the upwind distance from houses to prescribed burning within 5 years, and (6) the number of buildings or structures within 40 m of houses. All fuel treatments were more effective if undertaken closer to houses. For example, 15% fewer houses were destroyed if prescribed burning occurred at the observed minimum distance from houses (0.5 km) rather than the observed mean distance from houses (8.5 km). Our results imply that a shift in emphasis away from broad-scale fuel-reduction to intensive fuel treatments close to property will more effectively mitigate impacts from wildfires on peri-urban communities.