The warning, which extends from Plymouth south and west to Woods Hole, including Cape Cod, Nantucket and Martha's Vineyard, means tropical storm conditions were expected during the next 24 hours, according to the National Hurricane Center in Miami.
Additional watches or warnings may be necessary for parts of Long Island and the New England Coast later Thursday, the center said.
The storm was cruising roughly parallel to the East Coast and within range of land-based radar early Thursday, hurricane specialist Jack Beven said, but the winds on the landward side of the storm didn't extend far enough from the center to be felt on the U.S. coast.
The storm should make a gradual turn to the northeast Thursday and pass near Cape Cod and coastal Massachusetts, where higher surf and winds were most likely to be felt Friday morning, he said.
At about 5 a.m. EDT, the storm's maximum sustained winds were near 60 mph, above the 39 mph threshold for a named storm but below hurricane strength of 74 mph.
The storm was centered about 210 miles south of New York City and about 295 miles south-southwest of Nantucket. It was moving north at about 9 mph, and a turn to the northeast was expected sometime Thursday.
On Wednesday, Beryl passed about 100 miles off North Carolina, where initial warnings about the second tropical storm of the 2006 Atlantic hurricane season did little to deter golfers, boaters or fishermen.
"It was blowing 15 to 20 (mph) and the sea was rolling up a little bit, but we've fished in worse," said Brynner Parks, 48, after a day on his 58-foot commercial fishing boat with six clients from Maryland.
A record 28 named storms and 15 hurricanes, including destructive Katrina, occurred during last year's June-November Atlantic hurricane season.
The first named storm of the 2006 season, Tropical Storm Alberto, splashed ashore in Florida in mid-June, then plowed northward along the coast past the Outer Banks. It was blamed for one drowning.