The category one storm has hit the mouth of the Mississippi River, after killing at least 30 people in Central America.
Hurricane Nate has made landfall for the second time along the US Gulf Coast, bringing torrential wind and rain.
The hurricane made landfall outside Biloxi, Mississippi, as a category one storm in the early hours of Sunday morning.
It is the first time a hurricane has made landfall in Mississippi since Katrina caused widespread flooding and loss of life in 2005.
Nate had already made landfall earlier on Saturday night at the mouth of the Mississippi River in southeast Louisiana.
At 2am local time it was located five miles north of Biloxi, and was travelling north.
It had weakened slightly and had maximum sustained winds of 85mph (137kph), according to the National Hurricane Centre.
Nate has already killed at least 30 people in Central America and is the fourth major storm to hit the US in less than two months.
The storm surge from Hurricane Nate caused flooding along the seafront in Bliloxi, and across communities in Mississippi and Alabama.
"We have a restaurant and one of our main bars open so they have been okay so far," said Chett Harrison, the general manager at the Golden Nugget hotel and casino in Biloxi.
"No one has tried to leave, thank goodness, because everything is flooded around us," he told a local CBS TV station.
States of emergency were declared in Louisiana, Mississippi and Alabama, as well as 29 Florida counties, ahead of the storm.
Residents in areas outside New Orleans' were evacuated and the city was placed under a curfew from 7pm.
But the city has avoided the worst of the winds and storm surge as Nate passed east.
New Orleans mayor Mitch Landrieu lifted the curfew around an hour after it started, once it became clear the storm would not cause major problems for the city.
The storm passed by Mexico's Yucatan peninsula - home to beach resorts incuding Cancun and Playa del Carmen - as it headed north.
Around three quarters of US Gulf of Mexico oil production was turned offline ahead of the hurricane's arrival.
At least 12 people were killed by the storm in Nicaragua, nine in Costa Rica, two in Honduras and two in El Salvador.