Tungurahua, located about 130 kilometres south of Quito, has been increasingly active since May, when it blew out big clouds of hot gas and prompted officials to renew a limited state of emergency in nearby towns.
Emergency officials said around 1,600 people had taken refuge in make-shift shelters, but some had ignored repeated warnings and returned home to rescue their farm animals and recover belongings.
A rain of molten rock in the past four days that set fire to trees and grass marks the volcano's strongest recorded activity since it began erupting in 1999.
Flows of molten rock, ash and gas have blocked roads and destroyed bridges near farming hamlets tucked in the folds of the 5,020-metre high Tungurahua.
Gray ash covers homes and corn fields in Bilbao, and the bodies of dead cows and chickens lie rotting in villages surrounding the volcano.
Emergency officials have said if the volcano's activity increases this week, other nearby towns would be forced to evacuate.
Scientists with Ecuador's geophysics institute said there was a high risk for towns located at the foot of Tungurahua.
The volcano's crater is little more than 1.6 kilometres south of the tourist resort town of Banos.
The town’s 17,000 residents were forced to evacuate in 1999 after loud explosions and huge plumes of ash billowed out of its crater.
President Alfredo Palacio has promised around US$5.7 million in relief funds for the area.
Emergency officials said shelters urgently needed more medicine, blankets and mattresses.