Mount Kelud, which has been rumbling for weeks, was placed on the highest alert level, meaning scientists believe a major eruption is imminent, said a posting on the government-run volcanology center Web site.
The status requires local authorities to begin evacuations.
Surono, a top scientist at the center, said all people living within 6 miles of the peak must leave. Authorities started transporting some away from the danger zone late Tuesday, he said.
The 5,679-foot Mount Kelud is one of the most active volcanoes in the world's largest archipelagic nation and last erupted in 1990. In 1919, a powerful explosion destroyed a hundred villages and killed 5,160 people.
The mountain is on Java island about 385 miles east of the capital, Jakarta.
Its explosive activity typically starts with a steam blast, when surfacing magma meets ground water. Such eruptions produce hot mud flows and pyroclastic surges and flows.
Evacuation orders at Indonesian volcanoes are often patchily enforced. Without compensating farmers for loses to crops or livestock, it is difficult to force them to leave their villages. Another worry for homeowners is thieves targeting empty properties.
Indonesia sits on the so-called Pacific "Ring of Fire," a series of volcanoes and fault lines stretching from the Western Hemisphere through Japan and Southeast Asia.