Inpe claimed to have logged 72,000 fires between January and August - the highest number since records began in 2013.
But the world's largest rainforest does still have a fire season, which starts in August and runs until November, peaking in September - meaning it has only just started.
Satellite images showed the northern state of Roraima covered in smoke, and neighbouring Amazonas has declared a state of emergency. The Amazonas capital Manaus has been on environmental alert since Friday due to the fires.
Forest fires in the Amazon are generating smoke that can be seen from space and may have caused a daytime blackout more than 1,700 miles away in the country's largest city.
The unprecedented surge in wildfires has occurred since Mr Bolsonaro took office in January, vowing to develop the Amazon region for farming and mining and ignoring worldwide concern over increased deforestation. Wildfires are common in the dry season, but are also deliberately set by farmers illegally deforesting land for cattle ranching. Since last Thursday alone, the INPE observed more than 9,500 forest fires.
He dismissed criticism, holding that farmers use fire to clear land this time of year. "Now I am Nero, setting the Amazon aflame", he was quoted by Reuters as saying. "If they are alarming, I will take notice of them in front of you", he told reporters.
Environmental activists, meanwhile, pointed to a recent increase in deforestation as the trigger for the fires.
Ricardo Mello, head of the World Wide Fund for Nature (WWF) Amazon Program, told the BBC the fires were "a outcome of the increase in deforestation seen in recent figures". It followed an Inpe report that showed an 88% increase in June compared to the same month a year previously. Bolonsaro denied the increases as "lies" that hurt the country's reputation and later fired the director of the INPE. Norway suspended funding to Brazil's Amazon Fund. California, which saw violently destructive wildfires last year, is still not off-the-hook, with meteorologists saying its worst wildfire could still erupt this year.
The move came after Bolsonaro's administration unilaterally changed the fund's governance structure and closed down the steering committee that selects the projects to back, making no formal proposal for the composition of a new committee. "Since taking office, the current government has been systematically dismantling Brazil's environmental policy", said Danicley Aguiar of Greenpeace Brazil. "Take that money and help Angela Merkel reforest Germany", he said.