About 3,700 people are being evacuated from the slopes of the Tungurahua volcano, 135km (85 miles) south of Ecuador's capital Quito.
Tungurahua began rumbling in May in its loudest activity since 1999, when it became active after eight decades of dormancy.
The town of Casua was evacuated as the volcano began spewing lava and toxic gases.
No casualties are reported but roads and bridges are blocked and villagers have lost cattle and crops.
Many villagers fled to refuge at schools and churches in the nearby town of Pingue.
Troops helped the evacuation from the volcano, which means "throat of fire" in the local language. President Alfredo Palacio visited affected villages.
Residents of Cotalo with stones projected by the volcano. The government has promised $5.7m in relief funds for the region.