Polls opened nationwide at 7am (04:00 GMT) are set to close at 7pm (16:00 GMT).
"People here are generally split between the two main parties but many here will vote for smaller parties because they are disappointed," said voter Dionysis Mitrogiannis, on his way to a polling station near the western town of Arta.
Opinion polls published before a blackout on September 1 showed Karamanlis's New Democracy leading the opposition PASOK party of George Papandreou by between one and two percentage points.
But both parties seem unlikely to be able to secure enough votes to form a government.
Papandreou has not ruled out forming a coalition with other parties but Karamanlis has suggested that Greece would be heading for another election if he did not win a strong mandate.
The far-right Popular Orthodox Rally could enter parliament for the first time and end up acting as a powerbroker.
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"When the prime minister called for these early elections just one month ago, he and all of his supporters were very confident of victory," Barnaby Phillips, Al Jazeera's correspondent in Athens, said.
"But the fires have changed the political atmosphere in Greece and now the outcome is very uncertain."
The two main parties have pledged to create jobs, improve standards of living and shore up an ailing pension system in the country which is the second poorest in the euro zone.
Karamanlis has been praised by the European Union for cutting deficits and turning around Greece's economy and he has vowed to push on with the reforms the country needs to catch up with its euro zone partners.
Despite this, Greek per capita gross domestic product (GDP) is the lowest in the zone next to Portugal's and 20 per cent of the population live below the poverty line.
But for villagers in the Peloponesse archipelago, one of the areas worst-hit by the blazes that torched homes, farms, olive groves and vineyards, it matters little who wins on Sunday.
"We have been burnt here, we can't even think of elections," Dimos Vlachos said in Makistos village, where his wife was among seven people who died.
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"We don't see or feel the elections. We are in limbo here."
The government handed out immediate compensation of about $4,000 for each victim but locals say there are many who are still too shocked to lodge their claims.
The government also outlined a reconstruction programme for the regions affected by the fires. Some victims fear a change of government could mean these pledges are ignored.
"I want the same government again because if things change again, with what we have already suffered, it will set us back even further," Asimo Bourouyanopoulou in the village of Artemida, told Reuters news agency.
More than 9.8 million people are eligible to vote Sunday, out of a population of 11.4 million, in Greece's 12th parliamentary election since democracy was restored in 1974 following a military dictatorship.
Nearly 500,000 are first-time voters.