Authorities said flaming rocks spat out by the volcano 40 miles (65 km) east of the Mexican capital set trees on fire and shook windows of nearby houses.
At 11:07 a.m. (1607 GMT), "there was a puff of smoke that lasted more than five minutes and which produced a cloud of ash more than four kilometers (2.5 miles) high," the Mexican Center for the Prevention of Disasters said in a statement.
No injuries were reported.
National radio said people living on the slopes of the Popocatepetl volcano fled their homes in fear and that authorities in the town of Atlixco decided to close schools.
It added that even several hours later a strong smell of sulfur was wafting through the streets of the nearby industrial city of Puebla.
Popocatepetl means "smoking mountain" in the local Nahuatl Indian tongue. The volcano stands 17,992 feet (5,485 metres) high and more than 100,000 people live on or near its slopes.
Azteca television showed images of thick smoke pouring out of the crater of Popo, as the volcano is affectionately known by Mexicans.
The radio said the government's early warning system failed to sound the alarm on Tuesday morning.
The disaster prevention agency did not change its "yellow" alert, which warns residents to be careful and watch for further announcements. A red alert -- the next level up -- would trigger evacuations.
Last year Popocatepetl blew its top 31 times, forcing an evacuation last June when it had its biggest eruption in 70 years. That emission covered Mexico City with a thin film of ash.
- Reuters - Thomson Reuters Foundation
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