Panicked residents fled their home on Monday in fear of Boko Haram attacks while the military sought to recapture ground lost to the militants in recent weeks.
The exodus from Mubi, the commercial hub of Adamawa state, began on Sunday after the insurgents seized Michika 42 kilometres (26 miles) away the day before, heightening fears of an impending strike.
The military is under increasing pressure to stop Boko Haram, which has seized control of a number of towns in Yobe, Borno and Adamawa states in recent weeks, prompting fears the government could soon lose control of the region.
On Monday, residents living near the airforce base in the Adamawa state capital, Yola, reported seeing an increase in sorties of military aircraft in the last few days.
But residents in Michika said airforce jets seen circling overhead were unable to bomb the insurgents because they had taken cover in civilian houses.
The military on Friday tried to retake Madagali, which fell into rebel hands last month, forcing troops to withdraw to Gulak, then to Mubi itself.
“With the fall of Michika into the hands of Boko Haram, Mubi is seen as their next destination,” Mubi resident Habu Bala told AFP.
The fear of attack was heightened after the families of police officers in the town were ordered to evacuate and seen leaving, said resident Muhammad Maishanu.
Mubi, which has previously been targeted by Boko Haram, had already seen an influx of thousands of residents escaping violence in Michika, Madagali, Gulak and several other villages near the border with Borno.
Locals have thronged the main bus depot in the town to catch taxis and commuter buses out of the town for the last few days, said Samaila Ado, who works at the coach station.
“The increasing large number of passengers far exceeds available vehicles, which has resulted in commotion as people jostle and struggle to secure seats on available buses and taxis. They just want to get out,” he said.
Many residents headed for Yola 145 kilometres away as well as the northern states of Taraba, Gombe, Bauchi and Kano, Ado added.
The spokesman of the Roman Catholic Diocese of Maiduguri, Gideon Obasogie, said he fled the town on Sunday.
“Thousands of others have also left Mubi for Yola for fear of attack. The Boko Haram militants are just capturing everywhere,” he told AFP.
“The Catholic church in Maiduguri diocese is gradually crumbling. A priest in Michika had to scale a fence yesterday to avoid being killed… He had to pass through some bush and mountains before he finally made it to Yola.”
Security fears prompted the indefinite closure of the Adamawa State University in Mubi, according to a university statement.
In October 2012, Boko Haram fighters were blamed for shooting dead at least 40 polytechnic students at their off-campus hostels in the town.
The United States last week said it was alarmed by reports that Boko Haram had captured the Borno town of Bama and the possibility of an attack on the state capital, Maiduguri, 70 kilometres away.
The military has claimed that it recaptured Bama in ground and air offensives, killing 50 insurgents in a battle near the town at the weekend.
Independent confirmation was not immediately available and in a 28-second audio message, a purported Boko Haram spokesman named Abu Zinnira refuted the claim.
The insurgents threatened to add to their territorial gains, the alleged spokesman said.
It was not possible to verify the authenticity of the recording but AFP received the message from the same channels as previous Boko Haram videos.