This work presents development of an algorithm to reduce the spatial uncertainty of active fire locations within the 1 km MODerate resolution Imaging Spectroradiometer (MODIS Aqua and Terra) daytime detection footprint. The algorithm is developed using the finer 500 m reflective bands by leveraging on the increase in 2.13 μm shortwave infrared reflectance due to the burning components as compared to the non-burning neighborhood components. Active fire presence probability class for each of the 500 m pixels within the 1 km footprint is assigned by locally adaptive contextual tests against its surrounding neighborhood pixels. Accuracy is assessed using gas flares and wildfires in conjunction with available high-resolution imagery. Proof of concept results using MODIS observations over two sites show that under clear sky conditions, over 84% of the 500 m locations that had active fires were correctly assigned to high to medium probabilities, and correspondingly low to poor probabilities were assigned to locations with no visible flaming fronts. Factors limiting the algorithm performance include fire size/temperature distributions, cloud and smoke obscuration, sensor point spread functions, and geolocation errors. Despite these limitations, the resulting finer spatial scale of active fire detections will not only help first responders and managers to locate actively burning fire fronts more precisely but will also be useful for the fire science community.