Approximately one billion people across the globe are living in informal settlements with a large potential fire risk. Due to the high dwelling density, a single informal settlement dwelling fire may result in a very serious fire disaster leaving thousands of people homeless. In this work, a simple physics-based theoretical model was employed to assess the critical fire separation distance between dwellings. The heat flux and ejected flame length were obtained from a full-scale dwelling tests with ISO 9705 dimension (3.6 m × 2.4 m × 2.4 m) to estimate the radiation decay coefficient of the radiation heat flux away from the open door. The ignition potential of combustible materials in adjacent dwellings are analyzed based on the critical heat flux from cone calorimeter tests. To verify the critical distance in real informal settlement fire, a parallel method using aerial photography within geographic information systems (GIS), was employed to determine the critical separation distances in four real informal settlement fires of 2014–2015 in Masiphumelele, Cape Town, South Africa. The fire-spread distances were obtained as well through the real fires. The probabilistic analysis was conducted by Weibull distribution and logistic regression, and the corresponding separation distances were given with different fire spread probabilities. From the experiments with the assumption of no interventions and open doors and windows, it was established that the heat flux would decay from around 36 kW/m2 within a distance of 1.0 m to a value smaller than 5 kW/m2 at a distance of 4.0 m. Both experiments and GIS results agree well and suggest the ignition probabilities at distances of 1.0 m, 2.0 m and 3.0 m are 97%, 52% and 5% respectively. While wind is not explicitly considered in the work, it is implicit within the GIS analyses of fire spread risk, therefore, it is reasonable to say that there is a relatively low fire spread risk at distances greater than 3 m. The distance of 1.0 m in GIS is verified to well and conservatively predict the fire spread risk in the informal settlements.