Amber Haigh and her six-month-old son had been living with a married couple in Kingsvale, a town in the South West Slopes, when she vanished on June 5, 2002.
The 19-year-old's disappearance is being investigated by a strike force which is treating it as a murder investigation, State Crime Command Homicide Squad Commander Detective Superintendent Danny Doherty said on Tuesday.
The couple said they dropped Ms Haig at Campbelltown train station so she could visit her sick father in hospital in Mt Druitt, in Sydney's west.
They reported her missing two weeks later, on June 19.
Despite extensive inquiries over many years, including numerous public appeals, Ms Haigh's fate remains unknown.
"It's highly unusual circumstances that Amber would leave her six-month-old baby," Det Supt Doherty said.
"She would always take her baby with her everywhere she went.
"We can't discount the fact that Amber never made it to the Sydney area, and may have met foul play in the Harden, Young ... area."
At 8.45pm on the day she went missing, records indicate money was withdrawn from her account from an ATM in Campbelltown.
However, police have been unable to verify the withdrawals through witness accounts or CCTV.
Det Supt Doherty said the investigation had also been frustrated by the delay in reporting her missing.
In 2011 a coroner found Ms Haigh had been murdered, or died of misadventure, in early June 2002.
The matter was referred to the unsolved homicide squad and Strike Force Villamar II is now reinvestigating her disappearance.
Most inquiries have been based around the Campbelltown community where Ms Haigh was last seen, but new investigations will be made in Harden, Young and the Kingsvale area.
Detectives plan to conduct doorknocks and retrace the journey taken by the young mother.
"Amber's six-month-old boy grew up not knowing his mother and that is terribly sad circumstances," Det Supt Doherty said.
"Amber's mum and sister still have no answers for what is a 20-year-old mystery."
Police released a video message from her heart-broken mother Rosalind Wright.
"I know in my heart that she would never have left her son," Ms Wright said.
The reward for information about Haigh's disappearance has been increased from $100,000 to $1 million.
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