Cyclone Tiffany started crossing the coast as a category one system about 10am on Wednesday, the Bureau of Meteorology said.
It is currently east of Ngukurr, 635km southeast of Darwin, and south of Groote Eylandt, and heading west at 27km/h.
It was forecast to impact the NT's gulf coast as a category two system but weakened overnight.
The system is expected to continue tracking west across the Top End throughout the day and weaken below cyclone strength over land.
A warning has been issued for communities from Alyangula to Port McArthur, including Port Roper and the remote communities of Ngukurr and Numbulwar, 780km southeast of Darwin.
Wind gusts up to 100km/h are likely from Port Roper to the Nathan River area.
A storm tide bringing damaging waves and flooding is likely between nearby Port McArthur and Alyangula, and on Groote Eylandt.
Heavy rain across parts of the Arnhem Land and Daly District may cause flooding of low lying areas as rivers rise.
Tiffany was a category two cyclone packing winds of up to 130km/h when it crossed the east coast of the Cape York Peninsula on Monday afternoon.
It weakened to a tropical low over land, dumping 120mm of rain in some areas in the 24 hours to 9am on Monday.
It reformed into a tropical cyclone over the gulf on Tuesday.
Three people were rescued after their vehicle got caught in floodwaters in far north Queensland, northwest of Cairns.
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