The tornado is near Central City, a metropolis which is home to 1,200 people.
A tornado warning has been issued by the National Weather Service for Central City, Cascade and Monticello in Iowa.
Shocking footage posted to Twitter by Allen Reisner, an Iowa resident, shows the tornado moving across the countryside as Mr Reisner records from a vehicle.
He can be heard shouting, referring to the tornado: “It’s down, it’s on the ground, it’s on the ground”.