Understanding pyro-convective clouds is essential. These clouds transport significant quantities of aerosols and gases into the upper atmosphere, and therefore influence atmospheric composition, weather, and climate on a global scale. This study investigates the dynamics of pyro-convective clouds during the Australian New Years Event 2019/2020 using convection-resolving simulations that incorporate the effects of sensible heat and moisture released by fires. These effects are modeled through parameterizations using retrievals from the Global Fire Assimilation System (GFAS). The results show that the plume top height remains unchanged when accounting for fire-induced heat and moisture release in regions where convective cells form independently of the fire. In areas with the most intense fires, the sensible heat and moisture release from the fire provide the necessary buoyancy for enabling the formation of pyro-convective clouds. These pyro-convective clouds lift aerosol masses up to 12.0 km. During their formation, the top height increases by an average of 5.5 km. Additionally, the plume height increases on average 0.87 km by fire-induced heat and moisture in cloud-free areas. We demonstrated that sensible heat release is the primary contributor to pyro-convective cloud formation. However, the release of moisture enhances the formation process and increases the lifetime of the pyro-convective cloud. Comparisons with observational data reveal an underestimation of the distribution and the height of the plume, which is however in good agreement with the simulations approximately 5–6 hours after the observation, indicating that the simulation of pyro-convective cells is well-captured, albeit temporally shifted.