NSW Police confirmed the synagogue on Railway Parade in Allawah was defaced between 3.55am and 4.30am today.
The building was spray painted with at least a dozen nazi symbols and a number of antisemitic slurs.
Prime Minister Anthony Albanese said those responsible would face the full force of the law.
“These crimes are hateful, there’s no place in Australia – our tolerant, multicultural community for this sort of criminal activity,” Albanese said.
“Australians should respect each other and overwhelmingly do regardless of their faith.
“We are a multicultural nation, we need to be inclusive and cohesive.”
The NSW Jewish Board of Deputies say the community has been left “outraged” by the attack.
“This is unacceptable and undermines the social harmony and cohesion which Australians have long treasured,” David Ossip, President of the NSW Jewish Board of Deputies said.
“No Australian should be afraid to attend their place of worship or be fearful walking the streets of their community...
“Laws must be tightened to more effectively deal with hate speech and incitement to violence and individuals who commit crimes such as this must receive penalties sufficient to ensure that such conduct is deterred and not normalised.”
Police are investigating the crime.
