The ferocious storm has submerged entire neighbourhoods up to their roofs, swamped Mississippi's beachfront casinos and blown out windows in hospitals, hotels and high-rises.
For New Orleans - a dangerously vulnerable city because it sits mostly below sea level in a bowl-shaped depression - it was not the apocalyptic storm forecasters had feared.
But it was bad enough on Monday, in New Orleans and elsewhere along the coast, where scores of people had to be rescued from rooftops and attics as the floodwaters rose around them.
At least 55 deaths were blamed on Katrina - they included three people killed by falling trees in Mississippi and two killed in a traffic accident in Alabama.
And an unknown number of other people were feared dead in flooded neighbourhoods, many of which could not be reached by rescuers because of high water.
"Some of them, it was their last night on Earth," Terry Ebbert, chief of homeland security for New Orleans, said of people who ignored orders to evacuate the city of 480,000 over the weekend. "That's a hard way to learn a lesson.
A man videotapes a car crushed
by falling debris
"We pray that the loss of life is very limited, but we fear that is not the case," Louisiana Governor Kathleen Blanco said.
Katrina knocked out power to more than three-quarters of a million people from Louisiana to the Florida's Panhandle, and the authorities said it could be two months before electricity is restored to everyone.
Ten major hospitals in New Orleans were running on emergency backup power.
The federal government began rushing baby formula, communications equipment, generators, water and ice into hard-hit areas, along with doctors, nurses and first-aid supplies. The Pentagon sent experts to help with search-and-rescue operations.
Forecasters said that as the storm moves north through the US midsection over the next few days, it may spawn tornadoes over the Southeast and swamp the Gulf Coast and the Tennessee and Ohio Valleys with a potentially ruinous 20cm or more of rain.
Oil refiners said damage to their equipment in the Gulf region appeared to be minimal, and oil prices dropped back from the day's highs above $70 a barrel.
But the refiners were still assessing the damage, and the Bush administration said it would consider releasing oil from the nation's emergency stockpile if necessary.
A New Orleans police car is
abandoned in the raging storm
Katrina had menaced the Gulf Coast over the weekend as a 280kph, Category 5 monster, the most powerful ranking on the scale.
But it weakened to a Category 4 and made a slight right-hand turn just before it came ashore around daybreak near the Louisiana town of Buras, passing just east of New Orleans.
In nearby coastal St Bernard Parish, Katrina's storm surge swamped an estimated 40,000 homes.
In a particularly low-lying neighbourhood on the south shore of Lake Ponchartain, a levee along a canal gave way and forced dozens of residents to flee or scramble to the roofs when water rose to their gutters.
"I've never encountered anything like it in my life. It just kept rising and rising and rising," said Bryan
Vernon spent three hours on his roof, screaming over howling winds for someone to save him and his fiancee.
Across a street that had turned into a river bobbing with rubbish cans, litter and old tyres, a woman leaned from the second-storey window of a brick home and pleaded to be rescued.
"There are three kids in here," the woman said. "Can you help us?"
Blanco said 200 people have been rescued in boats from rooftops, attics and other locations around the New Orleans area, a scene playing out in Mississippi as well.
In some cases, rescuers are sawing through roofs to get to people in attics, and other stranded residents "are swimming to our boats", the governor said.
A New Orleans resident takes a
close view of the storm
Elsewhere along the Gulf Coast, Mississippi was subjected to both Katrina's harshest winds and highest recorded storm surges - nearly 7 metres.
The storm pushed water up to the second floor of homes, flooded floating casinos, uprooted hundreds of trees and flung sailboats across a highway.
Gulfport, Mississippi, Fire Chief Pat Sullivan said: "It's complete devastation."
In Alabama, Katrina's arrival was marked by the flash and crackle of exploding transformers. The hurricane toppled huge oak branches on Mobile's waterfront and broke apart an oil-drilling platform, sending a piece slamming into a major bridge.
At New Orleans' Superdome, home to 9000 storm refugees, the wind ripped pieces of metal from the roof, leaving two holes that let water drip in. A power outage also knocked out the air conditioning, and the storm refugees sweltered
in the heat.
Katrina also shattered scores of windows in high-rise office buildings and on five floors of the Charity Hospital, forcing patients to be moved to lower levels.