The weakened hurricane was still packing winds of up to 160 kph as it neared land, bringing with it a storm surge of almost two metres along the coast of North Carolina.
Power companies said more than 638,000 customers had lost power by early afternoon in south-eastern Virginia and eastern North Carolina.
Hundreds of thousands of people in the two states have fled their homes and moved inland to avoid the worst of Isabel, while meteorologists warned of the threat of tornados in parts of North Carolina, Virginia and south-eastern Maryland.
But a few thousand people ignored evacuation orders, prompting police in Virginia Beach to suggest they write their names in permanent marker on their forearms so they can be identified if they are injured or killed.
Forecasters say Isabel is expected to maintain its status as a hurricane for about 12 hours after landfall. It’s expected to move north across North Carolina and Virginia before moving through western Pennsylvania and New York state before dissipating in Canada by Saturday.
As the storm approaches, the US government has completely shut down Washington DC. Train services were halted south of the capital, and the Washington-area Metro system shut down all subway and bus services.
President George W Bush has declared a major disaster in parts of North Carolina, freeing up federal aid for afflicted areas.
The powerful storm forced Mr Bush to move up his meeting with Jordanian King Abdullah II, as rain and winds from Isabel neared Washington.
He was later evacuated to the Presidential retreat of Camp David in Maryland.