The storm came ashore on Wednesday afternoon close to Mexico Beach, on the Florida coast.
Michael is now one of the most powerful storms to hit the US mainland.
It battered the coastline with powerful gusts and crashing waves, sending debris flying. Footage posted to social media show the sheer size and power of the storm.
At least 103,000 customers are without power along the Florida Panhandle, according to utility companies.
"The window to evacuate has come to a close," Federal Emergency Management Agency administrator Brock Long said.
More than 375,000 people up and down the Gulf Coast were urged to evacuate. However many ignored the warnings in the hope of riding it out.
Earlier on Wednesday, Governor Rick Scott said Michael was “the worst storm that our Florida Panhandle has seen in a century.”
Diane Farris, 57, and her son walked to a high school-turned-shelter near their home in Panama City to find about 1,100 people crammed into a space meant for about half as many. Neither she nor her son had any way to communicate because their lone cellphone got wet and quit working.
"I'm worried about my daughter and grandbaby. I don't know where they are. You know, that's hard," she said, choking back tears.
Forecasters said rainfall could reach up to a foot (30 centimetres), and the life-threatening storm surge could swell to 14 feet (4 metres).
A tropical storm warning is currently in place covering 21 people in several states according to CNN.
Michael is projected to hit several mainland cities including Tallahassee and Albany.
Additional reporting by AP.
