Mount Lokon, on Sulawesi, started erupting at around 2230 local time (1530 GMT) on Thursday, according to reports.
There were no immediate reports of casualties.
The last month has seen a significant rise in volcanic activity in the area, and the alert status was raised to the highest level just days ago.
The eruption saw ash, sand and rocks thrown 1,500m (4,800ft) into the air, government volcanologist Kristianto was quoted as saying by the AFP news agency.
A 3.5-km (two mile) evacuation zone was established last weekend, within which around 28,000 people live, of whom 4,400 have been moved so far.
"There is no mass panic because the community has already been warned of the situation and we are continuing to evacuate people," Kristianto added.
Among the dozens of volcanoes in Indonesia, the 1,580-metre (5,184ft) Mount Lokon is one of the most active. It last erupted in 1991.
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