Typhoon Megi hit the northern Isabela province at shortly before 6am UK time.
Thousands of villagers fled to safety amid fears that rice harvests could also be wiped out by the ensuing floods.
Power and communication lines are also expected to be brought down.
The storm packed sustained winds of 140mph and gusts of 162mph but could strengthen further as it progresses today.
Megi was expected to move on later Monday toward southern China, which already has evacuated more than 100,000 people from villages because of earlier flooding.
Vietnam's central coast, where 21 people have died in floods, also prepared for another soaking.
With its ferocious wind and rains, Megi is the most powerful typhoon to threaten the Philippines in four years, government forecasters say.
A 2006 howler with 155mph winds set off mudslides that buried entire villages, killing about 1,000 people.
Philippine weather officials issued the highest of a four-tier public storm alert for the two coastal provinces of Isabela and Cagayan and three mountain provinces where the typhoon is expected to pass before exiting the main northern island of Luzon into the South China Sea.
More than 3,000 people in coastal areas moved to school buildings and town halls that were turned into evacuation centres.
Classes and outdoor activities were cancelled, and officials advised families to have one person stay awake overnight for any contingency.
Ships and fishing vessels were told to stay in ports, and several domestic flights also were canceled.
Thousands of military reserve officers and volunteers were on standby, along with helicopters, including six Chinooks that were committed by U.S. troops holding war exercises with Filipino soldiers near Manila, said Benito Ramos, a top disaster-response official.
'This is like preparing for war,' Ramos, a retired army general, said. 'We know the past lessons, and we're aiming for zero casualties.'
An angry President Benigno Aquino III fired the head of the weather bureau in July for failing to predict that a typhoon would hit Manila.
That storm killed more than 100 people in Manila and outlying provinces.
Weather forecasts said the capital is expected to be spared a direct hit this time,although the lowest weather alert was in effect Monday with preschools closed.
In Cagayan, a vast agricultural valley crisscrossed by rivers and creeks, authorities ordered villagers to move out of high-risk neighbourhoods in 12 coastal towns.
"If nobody will budge, we may carry out forced evacuations," said Bonifacio Cuarteros of the provincial disaster office.
With its current course and speed, the typhoon is expected to barrel across the northern tip of Luzon then blow into the South China Sea later today toward northern Vietnam or southern China.
China's National Meteorological Center issued its second-highest alert for potential 'wild winds and huge waves,' warning vessels to take shelter and urging authorities to brace for emergencies.
Floods triggered by heavy rains forced more than 100,000 people to evacuate from homes in China's southern island province of Hainan, where heavy rains left thousands homeless over the weekend, the official Xinhua News Agency reported Monday.
Record-level flooding in Hainan over the past month has damaged roads, overflowed reservoirs and cut off telecommunication networks across the region.
In central Vietnam, the death toll from heavy rains and floods over the weekend rose to 21, disaster officials said Monday, warning that Megi could add to the misery.
'People are exhausted,' Vietnamese disaster official Nguyen Ngoc Giai said by telephone from Quang Binh provinvce.
'Many people have not even returned to their flooded homes from previous flooding, while many others who returned home several days ago were forced to be evacuated again.'
Some 300 Vietnamese soldiers have been deployed to rush instant noodles, rice and water to people affected by the floods, he said.
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