Irene is on track to be the worst storm to hit the East Coast in 20 years, now heading north-northwest with wind speeds up to 115 mph.
Overnight, Irene tore through the Bahamas with pounding winds and driving rain. Her next stop is the Carolinas.
Forecasters expect the system to make landfall as a Category 3 hurricane in North Carolina's Outer Banks on Saturday afternoon.
As a result, the governors of North Carolina and Virginia have declared a state of emergency. Residents of the Outer Banks are preparing for a possible 10 foot storm surge.
Click here to follow the latest track of Irene from the National Hurricane Center.
Virginia's Norfolk Naval Station -- the world's largest naval station -- is in the path of the storm. In preparation, the U.S. Navy is sending 27 war ships, including an aircraft carrier, out to sea.
The flotilla of ships will head out to safer waters, conducting training exercises at sea in the meantime.
Forecasters are predicting Irene could strengthen to become a monster Category 4 storm with winds of at least 131 mph.
In the Bahamas, the head of the island chain's Emergency Management Agency says at least two villages were 90 percent destroyed by the storm.
As Irene heads toward the U.S., the storm is only expected to become more dangerous as it picks up speed and strength.
"People need to pay attention and go ahead and make sure they're ready -- from the Mid-Atlantic all the way through the Northeast and New England states," said Craig Fugate, administrator of Federal Emergency Management Agency.
Stay up to date with the latest bulletins and advisories on Hurricane Irene here.
State officials have issued a mandatory evacuation order for Ocracoke Island in North Carolina. Still, some residents are ignoring the orders and choosing to stay, saying they know the risks.
"I think it's important to recognize that if you chose to stay -- as we're almost certainly going to do -- you can't then expect emergency services to come to your aid. You're making a voluntary decision to put yourself in a more risky situation than otherwise," Ocracoke resident Justin LeBlanc said.
The system is expected to move all the way up the East Coast, affecting more than 65 million people.
Officials in Massachusetts are encouraging residents along the coast to begin preparing for Irene's arrival.
"Some people should start boarding up their house. What we suggest is people that are vulnerable, start making a plan now," said John Murphy, deputy chief of the Scituate, Mass. Fire Department.
If Irene comes ashore in New England, it could be the biggest storm to make landfall there since 1991.