The volcano in Ternate on northern Maluku Island came to life earlier this month and began erupting, spewing clouds of searing ash, the Jakarta Post reported Wednesday.
Provincial spokesman Andi Arief said the cold lava slides destroyed several houses in the villages.
"Initial data cited that three people died, while many other residents (were) evacuated to a school building and the former North Maluku governor's office," Andi said in a statement.
The mud flooding was created by heavy rainfall, China's Xinhua news agency reported, quoting a disaster management agency spokesman.
Volcanic ash covered several villages in the area, the Post said. Authorities urged residents to remain alert.