Packing winds of 170km per hour, the storm was expected to hit land on Thursday at around 1600 GMT and sweep up the East Coast in the direction of the US capital Washington.
The storm's path of destruction could touch 50 million people nationwide, according to the US Census Bureau.
"All preparations to protect life and property should be rushed to completion in the hurricane warning area," the Miami-based US National Hurricane Center warned.
The edges of the storm were already unleashing 65-80km per hour winds, torrential rain and towering waves on the North Carolina coast.
Emergencies were declared in North Carolina, Maryland and Virginia states.
Authorities ordered the evacuation of more than 225,000 residents from low lying islands just off the coast of North Carolina and Virginia.
Washington, which is also in Isabel's path, also ordered precautions.
Federal agencies will be closed on Thursday and only emergency employees are be expected to work.
The House of Representatives was shutting down and the Senate was closing early, while the White House said it was "working to secure items that may be blown away".
Transport and other services warned of closures.
Navy ships sailed into the Atlantic to ride the storm out, and scores of military planes were flown to sheltered bases around the country.
Commercial flights were cancelled or rerouted to safer destinations.
Many North Carolina residents
are preparing to flee Hurricane
In the beach resort of Kitty Hawk, where the Wright brothers flew their first plane 100 years ago, most residents had boarded up and left town earlier on Wednesday.
"Most people are being smart, they're making plans to evacuate, getting their last belongings," firefighter Cole Yeatts said.
"We're orienting them toward shelters, but a lot of them are going to stay with family and friends."
Forecasters were predicting 3.5m storm surges and 25cm of rain in coastal areas before Isabel moves northwewst late on Thursday.
North Carolina Governor Mike Easley said he will ask President George Bush for a federal disaster declaration releasing federal aid for the cleanup.
And he warned all will not be well when Isabel blows over.
"The most important thing I can ask people to do is consider every downed wire a hot wire," he said.
"Keep in mind most injuries occur not during the storm but after the storm."
Isabel is a strong Category Two storm on the Saffir-Simpson scale, which goes up to five.
It can cause flooding, overturn mobile homes and damage roofs and windows on houses.