The hurricane's maximum sustained winds Thursday morning were 80 mph (130 kph). The storm's outer bands have started to reach southern parts of North Carolina.
Hurricane warnings on the state's coast stretch from Surf City to the Virginia border.
Arthur is centered about 300 miles (480 kilometers) southwest of Cape Hatteras, North Carolina, and is moving north near 9 mph (15 kph).
The first named storm of the Atlantic hurricane season has prompted a mandatory evacuation for visitors to the Outer Banks' Hatteras Island. Residents also are advised to leave.
Up the East Coast, worries of weather from Arthur have prompted some cities to delay fireworks and other July Fourth festivities. Forecasters warn of rain, wind and potentially life-threatening rip tides.