The observatory said the lava was erupting from the volcano's lower East Rift Zone. NBC affiliate KHNL of Honolulu quoted residents as saying they could see lava spilling from cracks in roadways.
Ikaika Marzo said he first noticed fountains of lava spouting 100 feet, and scrambled to call everyone he knew in the area.
"When we drove on that road, we heard a noise in the forest and it was like a little thump," he told KHNL. "Next thing, like three to five seconds after that, we smelled sulfur. After that, that's when there was tons of sulfur. Then we saw some lava popping out."
Some residents took the evacuations in stride.
"I'm just hoping that it doesn't hurt anybody's home or hurt anyone, wherever Pele decides to pop out," Bailee Yamada of the Puna region told KHNL, invoking the name of the Hawaiian goddess who legend says lives on Kilauea's summit.
"If Pele comes, Pele comes," Curt Redman of Puna told the station. "Now we're kind of crossing our fingers to see what Pele might do next."
It's unclear how long the eruption will continue, scientists say.
Kilauea is the most active of the five volcanoes that form the island of Hawaii. Its most recent major eruption came in June 2014, disgorging lava flows that continued for months before they stopped just short of the town of Pahoa.