Cyclone Debbie has been downgraded after making landfall in Queensland, but there are still warnings of high winds and strong rain, with a man seriously injured by a falling wall.
Emergency services fear further reports of injury and even death.
The tropical cyclone has been downgraded again to a category two system, having made landfall along the state's northern coastline near Airlie Beach as a category four storm.
The destructive 50km-diameter eye wall passed Hayman Island this morning, and has hit the Whitsunday Islands and the nearby mainland and is slowly moving inland.
Queensland Premier Annastacia Palaszczuk said there had been reports of damage in places including Proserpine and other smaller communities between Bowen and Mackay.
"We're going to be getting a full assessment of the extent of the damage tomorrow morning at first light," she said.
"Please stay inside, do not leave your homes until authorities give you the OK to do so."
Ms Palaszczuk said the town of Collinsville, south-west of Bowen, was in the firing line tonight.
"Collinsville has never experienced a category two cyclone before ... they will feel the full force of the winds."
According to the Bureau of Meteorology (BOM), the system has winds near the centre of 100km/h, with wind gusts of up to 140km/h.
At a news conference this afternoon, Queensland Police Service Commissioner Ian Stewart said a man had been seriously injured in Proserpine.
"A gentleman has been badly hurt by a collapsing wall at Proserpine - we don't know the condition of the person at this time," Commissioner Stewart said.
"We need to understand we are going to get lots of reports of damage and injury, if not death, and we need to be prepared for that."
The BOM said destructive winds could extend further north-west along the coast to Ayr and to adjacent inland areas, including Collinsville and Mount Coolon late today and into the evening, but were no longer expected in Townsville, Charters Towers, Mackay or Sarina.
At 3.10pm (Queensland time), Cyclone Debbie was moving south-west at 13km/h.
'We've got water coming down the hallway'
ABC reporter Jonathan Hair was sheltered in Airlie Beach and said the other side of the cyclone's eye wall had started to affect the area, with wind and rain picking up again.
"It's really, really loud. That's the only way to describe it. I want to say it's terrifying just because you know what it is and you know how powerful it is and you know the winds are going upwards of 100km/h to 200km/h and slamming into your hotel room," he said.
"This is a fairly secure hotel - it's made of concrete, it was built recently, it's cyclone-rated - but at the same time, it's still blown gutters off roofs, doors off the side of the wall, it's blown ceiling fans off the ceiling.
"I haven't been outside because we're in lockdown, but we can see some yachts that have broken their mooring and run into each other down at the Port of Airlie Beach."
Hayman Island was lashed with gusts of up to 263km/h.
Ergon Energy said by 2pm more than 48,000 people had lost power in Airlie Beach, Proserpine, Bowen, Mackay and Cannonvale.
A woman from Proserpine told the ABC parts of her neighbour's roof had been flying off for several hours and smashing their windows.
"The doors are shaking, the interior doors to those rooms ... we've got water coming down all inside the sliding windows, it's just gushing and I've been mopping and mopping and I'm running out of towels."
The woman, who was identified only as Sue, said she was with her husband, but did not know if they were safe: "I'm in the safest place but that doesn't mean I'm safe. I'm in a very small bathroom."
Mackay Regional Council Mayor Greg Williamson told the ABC he was surprised at reports some people were out surfing.
"It puts everybody else, the agencies, life at risk when you've got to go and rescue them," he said.
The State Disaster Coordinator, Deputy Commissioner Steve Gollschewski, said once fully across the coast the cyclone would remain as a category three over land for 18 hours.
New Zealanders in the area have been fortifying their homes and building bunkers in their wardrobes ahead of the storm.
A very wet birthday
A group of New Zealanders who travelled to Hamilton Island in the Whitsundays for a 40th birthday were hunkering down in their flooded accommodation, waiting for the wild weather to pass.
Wind gusts of 263km/h were recorded at the airport near the island.
One of the group of seven, Brett McIntosh, said their house was flooded.
He said he stepped out on the deck when there was a quiet spell and saw three boats had sunk, 12 were on the rocks and one was disappearing off into the ocean.
Long-time Hamilton Island resident and business owner Gail Harvey described the size of the cyclone and severity of the winds as "horrendous".
"My ears have been popping from time to time and my head has been quite heavy with the air pressure, so it's just a matter of being patient and riding it out and then the big clean-up," she said.
"I'm actually tucked away in my unit, which I have been for over 24 hours now … it's very protected. We've got a hill behind us which protects us from the south, and we face north-east, so a very protected little area of the island."
But Ms Harvey said she was worried about her water-sport business and their vessels in the water.
"We pulled out three or four of them and put them into sheltered area, but the bigger boats we stripped all the equipment and tied them down quite securely," she said.
Charlie, also on Hamilton Island, said the trees were blowing about wildly.
"It's just like freight trains coming through left and right," he said.
"The place is just shaking continuously."
Jack Lumbey, who lived half way between Proserpine and Bowen, said it was howling outside.
"To think it's going to build up in another couple of hours is very daunting," he said.
It is the first cyclone for Bowen resident Sky Yasso, who did not sleep.
Her three young children, however, did not bat an eye overnight.
"It's very, very eerie here at the moment," she said.
"The rain is just like incredible actually - horizontal."
- ABC / RNZ