Residents in far north Queensland have been warned to prepare for heavy rains and gale force winds as tropical Cyclone Owen intensifies.

The Bureau of Meteorology says the cyclone, located northwest of Mornington Island, is expected to intensify further after it redeveloped into a category one system about 8pm on Tuesday.

Residents between the Queensland and Northern Territory border have been warned to prepare as the low pressure system gathers strength over the warm waters of the Gulf of Carpentaria.

The system is bringing heavy rain to Far North Queensland and could turn around overnight. (Weatherzone)

But on Wednesday or Thursday it is expected to slow down and turn back towards the Queensland coast.

Forecasters say it could escalate to a category three cyclone if conditions remain favourable, with a Friday crossing along the gulf's southeastern coast most likely.

On Mornington Island, 470km north of Mount Isa, some residents have already begun leaving as a precaution.

Mornington Shire chief executive Frank Mills says those who are staying need to be prepared.

"It's time for people to make sure they've got plenty of supplies to last them a period of time. They also need to make sure their yards and accommodation are cleaned," he told ABC radio on Tuesday.

"Anything that can become a missile in strong winds needs to be stacked away."

A cyclone watch is current from the Northern Territory's Cape Shield to Burketown in Queensland, including Groote Eylandt and Mornington Island.

The weather system has already dumped flooding rain in Queensland's far north after crossing the coast near the resort town of Port Douglas early on Monday.

Gales with gusts up to 110km/h are expected to develop between Cape Shield and the Northern Territory, Queensland border on Wednesday morning.

Gales could extend to Burketown, including Mornington Island, if the system follows a more southwest track.

Heavy rainfall is expected throughout the region.