Indonesia's seismological agency put the magnitude at 7.6 and immediately issued a tsunami alert over the radio and television.
It was revoked one hour later after the threat had passed.
People in the Maluku capital of Ternate, which was closest to the epicenter, fled from houses and hotels as the earth rumbled beneath them.
"I ran out of the hotel with other guests and we fled to high ground," Benyamin Otte said. "I could see people on the beach, checking to see if the were any signs of a tsunami, but everything looked normal."
Jimmy Rimba Rogi, the mayor of Manado, a city on nearby Sulawesi island, said the quake caused panic there as well, but there were no immediate signs of casualties or damage.
Indonesia is prone to seismic upheaval due to its location on the so-called Pacific "Ring of Fire," an arc of volcanos and fault lines encircling the Pacific Basin.
In Japan, a magnitude 7 quake hit off the coast of the northern island of Hokkaido early Thursday, triggering a small tsunami that apparently caused no injuries or damage, Japan's Meteorological Agency said.
The quake struck at a depth of about 12 miles, and a 4-inch tsunami rippled at the shore about 35 minutes later.
"There was some light shaking, but it was nothing major," police spokesman Yukio Yoshida said in Hokkaido.
In December 2004, a massive earthquake off Indonesia's Sumatra island triggered a tsunami that battered much of the Indian Ocean coastline and killed more than 230,000 people - 131,000 of them in Indonesia's Aceh province alone.
A tsunami off Java island last year killed nearly 5,000.
