Mount Karangetang, located on Siau, part of the Sulawesi island chain, spewed lava and hot ash hundreds of yards (meters) into the air.
At least four villagers living on the mountains slopes were missing, said Surono, a disaster official. Several others were badly hurt.
The volcano's last big eruption in July 2006 caused nearly 4,000 people to be evacuated from five villages.
Indonesia, the world's largest archipelago, is located on the so-called Pacific "Ring of Fire," an arc of volcanos and fault lines encircling the Pacific Basin.