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Indonesian authorities have raised the state of alert to its highest level.
The island's airport has now closed, leaving thousands stranded in the tourist hotspot.
Dark smoke has been seen billowing up to 3,400m (11,150ft) above the mountain's summit,
which has also emitted ash puffs.
Officials have also been warning residents to stay away from rock and debris flows known as
lahars, which have been spotted flowing down from the mountain.
The National Board for Disaster Management raised the alert to level four from 06:00 local
time (22:00 GMT Sunday), because of "the possibility and imminent risk of disaster".
The volcano was seen emitting "continuous ash puffs" occasionally accompanied by
"explosive eruptions" and "weak booms" that could be heard 12km (7 miles) from the
summit.
"The rays of fire are increasingly observed at night. This indicates the potential for a larger
eruption is imminent," it said in a statement (in Indonesian) on its Facebook page.
The volcano first began belching thick smoke last week - its first eruption in more than 50
years.
Indonesia sits on the Pacific "Ring of Fire" where tectonic plates collide, causing frequent
seismic and volcanic activity.
The last time Mount Agung erupted, in 1963, more than 1,000 people died.