A tropical low brewing off northern Australia could reach cyclone intensity before crossing the coast on Boxing Day.
A severe weather warning was issued for parts of the Northern Territory's Arnhem district early on Christmas morning.
Forecasters said a monsoon was likely to strengthen across the northern Top End during Saturday as a tropical low deepens near the Tiwi Islands.
The trough was expected to be near the Australian coastline during Saturday, then move inland by evening.
The worry is that the low is likely to strengthen as it moves south and may reach tropical cyclone intensity southwest of Darwin on Sunday.
"We are expecting the system to briefly develop into a category one system before crossing the coasts around Dundee beach tomorrow afternoon," Shenagh Gamble from the Bureau of Meteorology said.
"This system is bringing a lot of moisture to the Top End and regardless of whether or not it develops into a tropical cyclone, and if it decreases in strength as it crosses the coast.
"It will still bring heavy rainfall across the Top End over the coming days."
The system has already brought widespread rain, including a downpour of more than 70 millimetres at Point Stuart in just 30 minutes.
A tropical cyclone advice warning is current for the system, with heavy falls to continue leading to flash flooding during Saturday across northern Arnhem.
Damaging winds with gusts of up to 100 km/h with monsoonal squalls may develop about the coast from Saturday evening.
These conditions may persist or even increase during Sunday.
A flood watch is also current for parts of the Top End.
Locations that may be affected include Maningrida, Milingimbi, Ramingining, Galiwinku, Warruwi and Gunbalanya.
Northern Territory Emergency Service advises people to secure loose outside objects and seek shelter when conditions deteriorate.
Motorists should pull over if it's raining heavily and avoid driving into water of unknown depth and current.
Residents are urged to create their own sandbags if there is flooding and to stay away from flooded drains, rivers, streams and waterways.