Police say about 50 people on popular White Island at the time the volcano erupted but it's too dangerous for rescuers.
New Zealand's most active volcano erupted on Monday with at least one person killed and about two dozen people still trapped on White Island.
Plumes of white smoke and debris were sent into the air as a number of tourists visited the popular island.
Prime Minister Jacinda Ardern said there were people unaccounted for after the eruption, which occurred at about 2pm local time (01:00 GMT).
"A number of people are reportedly injured and are now being transported to shore," Ardern told a news conference. "It does appear to be a very significant issue ... particularly the scale of people affected, at this stage."
Those injured had suffered burns and many of those affected could be tourists, she said.
GeoNet agency, which had been monitoring the rumbling volcano, raised its alert level to four out of a maximum five. The White Island is about 50km (30 miles) from the east coast of North Island.
A statement from New Zealand Police said there were thought to be about 50 people on the island at the time of the eruption.
"Some of those people have been transported to shore, however, a number believed to be on the island are currently unaccounted for," the statement said.
The island's immediate surroundings were hazardous because of the eruption, the National Emergency Management Agency said in a statement. Rescue operations were on hold until conditions became safe.
Rachel Jackson-Lees, a journalist with Newstalk ZB in New Zealand, told Al Jazeera operators taking tourists to the volcano - New Zealand's most active - analyse the risks daily.
The island also has a container where people can take shelter in the event of an eruption, she said.
"It is not uncommon to hear of White Island eruptions," Jackson-Lees said. "What is uncommon is the level of intensity. It was classed as a level four [five the highest]. We get minor eruptions all the time but it's been some time since we had anything of this level and we certainly haven't had any casualties."
About 70 percent of the volcano is under the sea and at least 10,000 people go to see it every year.
"I'm not sure if these people were on the island or near it, but there was definitely one group out there and they definitely needed medical care," said Judy Turner, the mayor of the nearby coastal town of Whakatane.
"There were some injuries and the focus is on getting these injured people back safely and to get them to a hospital."
SOURCE: Al Jazeera and news agencies
