Video of the dramatic rescue Wednesday shows motorist Toni Doherty running from her car to help the koala near Port Macquarie, New South Wales (NSW) as the catastrophic fires that have ravaged the state burn all around them.
"It was terrifying to see him just come out of the flames and he looked so defenseless running along the road," Doherty told CNN 9News.
"I knew I needed to put something around him as I ran to the tree, so I just took off my shirt and covered him with it. I just tried to get him out of the fire, it was so hot and so frightening."
Doherty named the koala Lewis, after one of her seven grandchildren.
The pair were reunited Thursday at the Port Macquarie Koala Hospital, where Lewis is being treated for severe burns. The koala was wrapped in blankets and hooked up to an oxygen mask -- but was well enough to munch on the branches of eucalyptus placed by his bed.
But this story may not have a happy ending.
The hospital told 9News on Wednesday that Lewis only has a "50-50" chance of survival.
If he pulls through, it will still be a long road to recovery. Lewis' hands and feet are completely burnt. He also has burns on his stomach, chest, nose, and is badly singed all over his body.
More than 350 koalas are feared to have been killed by bushfires in NSW, according to animal experts. The Koala Hospital Port Macquarie said the fires have "decimated" the area, which is a key habitat and breeding ground for the marsupials.
As the fires rage on, detection dogs are helping to save koalas by sniffing them out in the wild as part of search and rescue operations.
The fires have been exacerbated by soaring temperatures, strong winds and the worst drought in decades. But summer hasn't really even begun -- and fears are growing that conditions will only get worse.
Australia's summer officially starts on December 1, but already the fire warning in South Australia has been raised to "catastrophic," the highest level on the ranking system.
Four people have died and hundreds of homes have been destroyed. More than 1,300 firefighters continue to battle the flames across Queensland and NSW states.
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