Taiwan regularly gets hit by typhoons but they generally land along the mountainous and sparsely populated east coast facing the Pacific.
Krathon is forecast to hit the major port city of Kaohsiung early on Wednesday afternoon, then work its way across the center of Taiwan heading northeast and cross out into the East China Sea, the Central Weather Administration (CWA) said.
The typhoon has strengthened into the equivalent of a Category 4 hurricane, packing powerful winds of more than 210 kph (125 mph) near its center, according to Tropical Storm Risk.
"The impact is getting bigger and bigger," said Gene Huang, forecaster at the CWA, pointing to threats to Taiwan's southwest and adding it was "rare" for such a powerful typhoon to make a direct hit to the island's western plains.
"It's a first in history for a typhoon with such movement and intensity," Huang said.
Huang warned residents there to be prepared for extreme winds of more than 150 kph (93 mph).
Kaohsiung Mayor Chen Chi-mai told reporters that the city should steel itself for a destructive storm, adding 1,690 people have been evacuated from danger zones so far.
"In short, the path of typhoon Krathon may cause a major disaster in Kaohsiung, and in mountainous regions there is a very high risk of disasters," he said.
Taiwan authorities said more than 1,000 rubber boats and 15,000 soldiers were on standby across Taiwan, including on the eastern coast where up to 1.3 meters (four feet) of rain was expected in the coming days.
"All military hospitals have set up emergency medical teams and they are ready to support anytime," said defense ministry spokesperson Sun Li-fang.
Boats to Taiwan's outlying islands have already been canceled and some domestic flights have been disrupted.
The rail line connecting southern Taiwan to the east coast stopped running mid-afternoon Monday, though other services including the north-south high speed railway were operating as normal, the transport ministry said.
It added that international flights were not yet impacted.
In July, typhoon Gaemi killed at least 11 people in Taiwan.