Thick grey smoke blown in by southerly winds smothered the island, shrouding the skyline and creeping into homes, with many residents avoiding going outdoors.
"The hazy conditions in Singapore have further deteriorated since last night, as denser haze from Sumatra has been blown in by the prevailing southerly winds," the National Environment Agency said in an advisory.
A reading of the Pollutant Standards Index (PSI) ending at 8pm local time showed that air quality had moved from "very unhealthy" earlier in the day to "hazardous".
The agency advised healthy persons to "avoid prolonged or strenuous outdoor physical exertion" and urged the elderly, pregnant women and children to minimise outdoor exposure.
Housewife Asnah Mohamad, 62, said she and her friend used their headscarfs to cover their face as they travelled to a mosque to celebrate the Muslim holiday of Eid al-Adha.
"My husband cannot leave the house because he has a heart condition so I represented him to collect the meat offerings," she told AFP, referring to the festival in which Muslims share the meat of a goat or sheep slaughtered as sacrifices.
"We hope it gets better soon. But what can you do? Go over there (to Indonesia) and pour water on the fire?" Businesses complained of a low turnout of patrons especially during a holiday, local media reported, and the Singapore Sports Hub complex suspended all outdoor activities.
Facility managers said they will "continue to monitor and assess the haze situation hourly" and will reopen when the air quality improves.
Minister for Social and Family Development Tan Chuan-Jin in a Facebook post late Thursday called for calm. "At all times refer only to official channels for information and do not circulate speculations," he wrote.
The city-state, which prides itself for its clean environment, has been cloaked in the haze in varying degrees for about three weeks, the worst such episode since mid-2013.
But Southeast Asia's most damaging cross-border bout with haze was in 1997-1998 when the smog caused an estimated USD 9 billion in losses in economic activity across the region.
The haze situation has been made worse this year by an El Nino weather system, which produces tinder-dry conditions in Indonesia and increases the risk of fires.