Only minor injuries are reported.
The most powerful storm to hit Bermuda in 50 years snapped off palm trees and knocked out power to 25,000 homes.
Crews from the United States and the Caribbean were called to the British territory to repair power lines.
Islanders bolted themselves inside homes or fled to hotels, some of which reported gushing leaks. Airports closed and all flights to Bermuda were canceled. It was unclear whether the airport would reopen Saturday because of the damaged causeway.
The eye of fast-moving Hurricane Fabian reached the western part of Bermuda on Friday afternoon, lashing the mid-Atlantic vacation spot with sustained winds of 120 mph, pelting rains and waves over 25 feet, reports CBS News Correspondent Lee Cowan.
Phone service was down in some areas, and hospitals were relying on generators. One man received minor injuries after being hit in the head by falling debris. Another woman's car was smashed by a downed tree but she walked away uninjured.
The satellite dish and instruments to measure wind speeds were ripped from their moorings and blown away from Bermuda's Weather Service, which was trying to make speedy repairs.
Rick Richardson, with Bermuda's Broadcasting Corporation, told CBS' Cowan he was only able to communicate using his battery operated phone.
"We will have tremendous structural damage," Richardson said.
"There's so much sea-spray ...it looks like it's snowing," said Susan Chandler, 52, from Manhattan, who watched Fabian from her rattling hotel windows.
Although Bermuda hasn't seen a Category 3 hurricane since 1953, when Hurricane Edna arrived here with 115 mph winds, the British territory requires houses to be built to withstand sustained winds of 110 mph and has underground power and phone lines.
About 160 people were moved out of the Sonesta Beach Hotel in the south, where 10-foot waves were crashing against the rocky coastline. Hundreds of others left their homes on the coast.
Tourist Robert O'Leary, 59, of Centerville, Nova Scotia, was in Bermuda visiting his pregnant daughter who was a week late delivering.
"We'll call the baby Fabian, I guess," said O'Leary, nervously passing the time sipping Goslings, Bermuda rum.
The last powerful hurricane to hit the British mid-Atlantic islands was Hurricane Emily in 1987, a Category 1 storm that tore off roofs, left homes without power for weeks and caused more than $50 million in damage.
By Friday afternoon, Fabian's eye had moved northward at 20 mph and had passed within 34 miles west of Bermuda's largest island, which is 21 miles long and 1½ miles wide.
Fabian moved away from Bermuda and weather conditions were expected to improve Saturday, the National Hurricane Center in Miami said.
"We've come up with a Fabian cocktail for our guests," said Paul S. Tormey, manager of The Fairmont Hamilton Princess hotel , which had nearly 300 guests. "The drinks will have umbrellas turned inside out."
Leah Cerconi, 25, a teacher who just moved to Bermuda from Hartford, Connecticut, said she and her boyfriend went out on their mo-peds Friday to try to see the large waves. But they turned back.
"It was so windy we turned around," said Cerconi, staying at the Fairmont and talking as water dripped from ceilings in the dining room and alarm bells rang through the hotel.
About 62,000 people live in the British territory 800 miles southeast of New York.