Tropical Storm Nora hovered far south of Mexico's Baja California peninsula, meanwhile, and was predicted to strengthen as it moved out over the Pacific.
Mexican officials set up shelters and warned residents to take cover from high waves, heavy rain and possible flooding in Veracruz.
Larry was expected to become a very strong tropical storm or hurricane and possibly make landfall by the weekend, said Dan Brown, a forecaster for the U.S. National Hurricane Center in Miami.
Mexico declared storm warnings and a hurricane watch for the coast from Veracruz east to Campeche on the Gulf coast. President Vicente Fox oversaw an emergency meeting of civil defense officials, and ordered the emergency supplies sent to coastal areas.
"It's going to pour down rain" over the next three days, Interior Secretary Santiago Creel said.
In Campeche, a major oil-producing area, three major ports were closed to ship traffic as heavy rain hit the area in advance of the storm.
Larry was stalled about 160 miles east-northeast of Veracruz, and little motion was expected Friday, the Hurricane Center said. Maximum sustained winds were near 60 mph, with higher gusts, and tropical storm-force winds extended up to 175 miles from the center.
Above-normal tides accompanied by "large and dangerous battering waves" were expected for the Bay of Campeche, along with flooding at all points where winds blow onshore, the center said in its storm advisory.
In Tabasco state, officials reported scattered evacuations because of floods covering more than 7,400 acres of banana plantations.
Nora, meanwhile, was stationary 550 miles south of the southern tip of Baja California. The storm had winds of 65 mph with higher gusts and was expected to strengthen, the hurricane center said.
By Luis Lopez