Forecasters downgraded Bill to a Category 1 hurricane as it neared the eastern U.S. seaboard, but tropical storm watches and warnings remained in effect for the Massachusetts coast and parts of Canada.
Bill churned up rough seas, created dangerous rip currents and closed beaches to swimmers up and down the East Coast, including President Obama's vacation spot, Martha's Vineyard.
It was expected to pass the mainland well off New England's coast late Saturday evening, but was still packing high winds and waves that had safety officials urging extreme caution. The core of Bill was expected to pass off Nova Scotia by Sunday, forecasters said.
On Saturday evening, Bill had maximum sustained winds near 85 mph and was about 300 miles south-southeast of Nantucket, Mass., and about 585 miles south-southwest of Halifax, Nova Scotia. The storm was moving north at 24 mph, forecasters said.
Canadian authorities issued selective hurricane watches and tropical storm warnings for its Atlantic maritime provinces, specifically parts of Nova Scotia, Prince Edward Island and Newfoundland. On its current track, Bill could threaten some oil and natural gas platforms and refineries in east Canada.
In Bermuda, the storm mostly spared the pink-sand shores though it cut power to about 3,700 customers and flooded some roads along the northern coast. The airport was closed overnight and all ferry service was canceled until Sunday.
Residents and tourists awoke to some water on the roads, rain and gusting winds.
"It was something to behold. I've never been in a hurricane before," said Kenny Mayne, 50, of Connecticut, a vacationer who hopes to head back to the U.S. on Sunday.
Heavy surf pounded Bermuda but neither the island's main hospital nor its urgent care center reported any patients with storm-related injuries.
Believe it or not we've had a very quiet night with Hurricane Bill," said Lieutenant Dana Lovell of the Bermuda Fire and Rescue Service.
On Friday night, the streets of Bermuda's capital were mostly empty and blanketed with rain. Luxury boutiques boarded up their windows. At the bar of the Fairmont Hamilton Princess hotel, a few guests sampled the "Dark 'n Stormy" cocktail as Bill's outer bands raked the island.
Most islanders hunkered down in their homes. Amanda Walker, a 31-year-old waitress originally from Toronto, said she and her boyfriend had to track down her cat, Mira, before the winds got any stronger.
"We just need to lock ourselves in and hope for the best," she said.
At 11 a.m. EDT Saturday, the center of Bill was about 435 miles south of Nantucket, Massachusetts, and about 710 miles south-southwest of Halifax, Nova Scotia, the U.S. National Hurricane center said.
On the U.S. East Coast, forecasters warned of offshore waves of 20 feet or more and rip currents at the beach during one of the summer's last weekends.
North Carolina expected flooding and beach erosion on the Outer Banks.
Bill was the first Atlantic hurricane this year after a quiet start to the season that runs from June through November.