"Leave my family out of it. Seriously," Mr Perrottet told journalists at a press conference in western Sydney on Thursday.
NSW upper house MPs have engaged professional help to track down his brother Jean-Claude Perrottet, who is wanted to give evidence at the inquiry into allegations of impropriety at the Hills Shire Council.
Mr Perrottet says he hasn't spoken to his brother and doesn't know where he is.
The inquiry has also requested to speak to another of his brothers, Charles Perrottet, although he is unable to be summonsed because he lives in Victoria.
Businessman Frits Mare told a NSW parliamentary inquiry on Wednesday that the premier's 26-year-old brother Jean-Claude and Hills Shire councillor Christian Ellis asked him for $50,000 in 2019.
He said the payment was to "get rid of (federal Liberal MP) Alex Hawke, stack his seat".
The premier says the inquiry is a political hatchet job cooked up by Labor to smear him in the lead-up to next month's election.
"This is a political inquiry by Labor," Mr Perrottet said.
As questions over the whereabouts of his brother continued, Mr Perrottet threw his hands in the air in frustration.
"I'm here elected to represent the people of NSW," he said.
"The Labor Party are playing smear games with my family."
The premier dismissed questions about whether the inquiry was sparked by comments from Castle Hill MP and Liberal Party member Ray Williams.
"Ray Williams never raised issues with my siblings in the parliament. He did not," Mr Perrottet said.
"So leave my family out of it.
"If you want to focus on my family, like Labor, go for your life."
The probe is examining matters raised under parliamentary privilege by Mr Williams in June, alleging several senior members of his party were paid to install new councillors who would be friendly to Sydney developer Jean Nassif.
Labor MP Penny Sharpe says the inquiry was put together after Mr Williams made serious allegations in parliament.
"There are three witnesses that have been summonsed to attend the inquiry," she told AAP on Thursday.
"There is still time for them to co-operate, and I encourage them to do so."
Former Hills Shire mayor Michelle Byrne testified at the inquiry on Thursday about being ousted from council, along with several other councillors in 2021.
"It was more than just a factional battle," she said.
"It's fair to say that I was not developers' favourite person."
Dr Byrne said she did not support the Cherrybrook train station expansion proposed by Toplace - the development company owned by Mr Nassif - because the density would have far exceeded existing infrastructure.
Labor MP John Graham asked if she thought cash from property developers to influence political processes was rife.
"Yes," she said.
"Are you concerned that one of the motives for changing the team was really about development in the Hills Shire Council?" Mr Graham asked.
"Yes, get the pain-in-the-butt mayor out of the way who's perceived as anti-development and have a better chance getting things through without me in the way ... fighting against it," Dr Byrne said.
However, she labelled the inquiry a "circus", saying the Independent Commission Against Corruption should be the only body responsible for delving further into allegations of branch stacking in exchange for money.
"I do not have any evidence of money changing hands or anything like that,'' Dr Byrne said.
"The only body that really can prove it is ICAC".
