The warning was posted for the islands of Flores, Corvo, Faial, Pico, Sao Jorge, Graciosa and Terceira, the National Hurricane Center in Miami said in its 5 a.m. EDT advisory.
Nadine, with maximum sustained winds of 50 mph, was about 300 miles west-southwest of the Azores, moving slowly north at 5 mph.
Forecasters said Nadine was expected to move erratically on Wednesday before settling into a southeastward pattern Thursday.
Little change in the storm's strength was expected during the next 48 hours.
Tropical storm-force winds extended outward from center up to 230 miles.
Swells generated by Nadine will affect the Azores, about 930 miles west of Portugal, for the next several days, the hurricane center said. The swells likely will cause life-threatening surf and rip current conditions.
Celebrity Breakups and divorces of 2014 [PHOTOS]