Mount Lewotobi Laki-laki, which is in East Nusa Tenggara province, erupted on Tuesday, spewing ash 11 km high, forcing the country's volcanology agency to raise the alert level to the highest.
It erupted again on Wednesday morning, belching a 1km high ash cloud, the agency said in a statement.
The eruption has caused Air New Zealand flights to and from Bali to be cancelled.
"NZ290 from Auckland to Bali scheduled for this morning has been cancelled due to volcanic ash forecast to affect the airspace. As a result, the return service NZ291 from Bali to Auckland has also been cancelled," Air New Zealand Chief Operating Officer Alex Marren said.
"The safety of our customers and crew is our top priority and we are closely monitoring the situation. We will be rebooking impacted customers on the next available service to get them to their destination safely. We recommend customers keep an eye on the Air NZ app or website for the latest information on their flight."
Several international flights from India, Singapore and Australia to Bali were cancelled due to the eruption, the Bali international airport website showed.
The government closed the Fransiskus Xaverius Seda airport in Maumere from Wednesday until Thursday "to ensure the safety of the passengers," said the airport operator AirNav in its Instagram post.
The eruption also forced local authorities to evacuate dozens of residents living in two villages near the volcano, Avi Hallan, an official at the local disaster mitigation agency told Reuters.
"Streets in the two villages were filled with thick ash, gravel, and sand," she said, adding no casualties were reported.
The volcano last erupted in May.
Indonesia sits on the Pacific Ring of Fire, an area of high seismic activity atop multiple tectonic plates.
