There were no immediate reports of casualties, the country's disaster mitigation agency said.
But rescuers moved to evacuate local residents as lava reached nearby villages and destroyed a bridge in Lumajang regency in East Java.
"A number of areas went dark after being covered by volcanic ash," agency spokesman Abdul Muhari said.
"We are building up some shelters in several locations in Lumajang," he added.
A video released by the agency showed locals, including scores of children, running for safety as Mount Semeru erupted at 3:00 pm local time (0700 GMT) on Saturday.
Local authorities established a restricted zone of five kilometres from the crater after the eruption.
Semeru's alert status has remained at its second-highest level since its previous major eruption in December 2020, which also forced thousands to flee and left villages covered.
Indonesia sits on the Pacific "Ring of Fire", where the meeting of continental plates causes high volcanic and seismic activity.
The Southeast Asian archipelago nation has nearly 130 active volcanoes.