The homes of about 10 million were under watches or warnings for the hurricane or tropical storm conditions.
Forecasters said conditions will deteriorate as the storm pushes ashore early Friday near the North Carolina-South Carolina line and makes its way slowly inland.
A mother and baby were killed when a tree fell on a house, according to a tweet from Wilmington police.
Shaken after seeing waves crashing in the Neuse River just outside his house in the town of New Bern, hurricane veteran Tom Ballance wished he had evacuated.
In this photo provided by NASA, Hurricane Florence churns over the Atlantic Ocean heading for the US east coast as seen from the International Space Station.
"I feel like the dumbest human being who ever walked the face of the earth", said Ballance, owner of a seafood restaurant that was flooded. "The house is shaking back and forth much more violently than when the eyewall came through".
Hurricane Florence was over the Atlantic Ocean about 55 kilometers east of Wilmington, North Carolina and moving northwest at 10 kilometers per hour.
But it was clear that this was really about the water, not the wind.
Artist Sarah Loeffler Misch shared several videos of the rising waters in Avon, North Carolina - part of the Outer Banks.
"This storm will bring destruction", North Carolina Governor Roy Cooper said.
Florence was one of two major storms threatening millions of people on opposite sides of the world.
Hurricane Irma destroyed Kathy Griffin's house in Florida a year ago, and it could be days before she finds out whether Florence smashed her fifth-story condominium in Wrightsville Beach, where authorities said utilities could be out for days or weeks.
Florence's rain will reach 40 inches in some parts of the Carolina coasts, forecasters said. Authorities warned, too, of the threat of mudslides and the risk of environmental havoc from floodwaters washing over industrial waste sites and hog farms.
The hurricane was seen as a major test for the country's Federal Emergency Management Agency, which was heavily criticized as slow and unprepared for Hurricane Maria in Puerto Rico previous year.
The National Hurricane Center downgraded it to a tropical storm on Friday afternoon, but warned it would dump as much as 30 to 40 inches of rain on the southeastern coast of North Carolina and into the northeastern coast of SC in spots.
The storm is expected to turn west and then north moving through the Carolinas and the Ohio Valley by Monday, the NHC said early on Saturday. That's enough to fill the Chesapeake Bay, he calculated. Forecasters warned of "catastrophic" freshwater flooding along the Carolinas.
Coastal streets flowed with frothy ocean water and tens of thousands lost electricity.
A gust of 105 miles per hour (169 km/h) was recorded at Wilmington airport, surpassing the power of Hurricane Fran two decades ago. Airlines canceled more than 2,400 flights through Sunday.
New Bern resident Dan Eudy said he and his brother were awakened on Thursday night by the sound of a boat ramming against his front porch.
Boat teams including volunteers rescued some 360 residents, including Sadie Marie Holt, 67, who first tried to row out of her neighborhood during Florence's assault.
The wind howled and sheets of rain splattered against windows of a hotel before dawn in Wilmington, where Sandie Orsa of Wilmington sat in a lobby lit by emergency lights after the power failed. "We didn't know where to go", she said. And that's when people found themselves trapped in their homes as the water rose.
"Honestly, I grew up in Wilmington". "These are folks who are maybe in one-story buildings and they're seeing the floodwaters rise".