With the fear of a major hurricane strike, coastal locations from Florida to Virginia took extensive preparations in advance of the storm. In addition to tropical cyclone watches and warnings, about 950,000 people evacuated from the Carolinas, and the military evacuated and relocated hundreds of aircraft and vessels out of the storm's projected path. Soldiers and guardsmen were deployed throughout those regions.
Hurricane Bonnie made landfall as a borderline Category 2–Category 3 storm, with intense wind gusts of up to and rainfall peaking at about . Reports of downed trees and powerlines, as well as structural damage such as blown out windows and torn off roofs, were reported. In coastal North Carolina, the storm washed ashore tens of thousands of tires that were part of an artificial reef. Crop damages were extensive, particularly to tobacco. Despite the effects, the storm was not as severe as predicted. Overall, damage is estimated at $1 billion (1998 USD), much of which was to crops.
Late on August 20, the first reconnaissance plane entered the storm and found a minimum central barometric pressure of 1001 mb. The storm brushed the Leeward Islands, although the main thunderstorm activity remained to the north over the open ocean. Early on August 21, Bonnie began to organize its broad circulation, and within the next day, intensification began. The storm began to look strong on satellite images, with banding features over the north and west quadrants. The Hurricane Hunters aircraft found a minimum pressure of 987 mb and a nearly complete eyewall early on August 22, and as a result, the tropical storm was upgraded into a hurricane. Bonnie slowed in forward speed, coinciding with previous forecasts. The storm was upgraded to a Category 2 on the Saffir-Simpson Hurricane Scale, which occurred with a substantial 15 mb drop in 8 hours. At the same time, steering currents weakened with the dissipation of the high pressure system; this, combined with the effect of a nearby trough, caused the storm to turn more towards the north-northwest around the western periphery of an anticyclone to the east. Bonnie became a Category 3 storm, a major hurricane, at 1200 UTC the next day, reaching its peak winds of at the same time.
Several scenarios as to where the storm would go existed at the time, and ranged from making landfall on North Carolina to turning out to sea. A mid- to upper-level trough slowed the storm to a nearly stationary early on August 23. However, a slow drift slightly west of northward began by the next National Hurricane Center (NHC) advisory, with the eye becoming more distinct and well-defined. The strengthening trend was broken because the storm churned up the waters beneath itself, bringing cooler waters to the surface, a result of the slow track. Another inhibiting factor may have been related to the same trough that caused the northward turn, though due to a large anticyclone over the hurricane, the effects were not substantial. Despite wind shear, the large and powerful circulation resisted weakening for a time. Early on August 25, the shear and the entrainment of dryer air into the hurricane took its toll on Bonnie, giving it a ragged appearance on satellite imagery, and the eye briefly became cloud-filled.
The storm accelerated somewhat by August 16, and by early that day, was moving at about . An approaching mid-level trough steered Bonnie north-northeast, and at 2100 UTC on August 26, the eye passed east of Cape Fear, North Carolina. The hurricane once again slowed, and early the next day, it made landfall near Wilmington, North Carolina as a strong Category 2 or weak Category 3 hurricane. Doppler weather radar displays estimated that maximum sustained winds had quickly weakened to below hurricane intensity, and the storm was briefly downgraded to a tropical storm. However, as the storm turned towards the right in response to the trough, the center neared open waters and winds began to re-intensify. The cyclone re-attained hurricane status at 0000 on August 28. Offshore, the center began drifting roughly eastward. Entering colder waters, the storm once again lost hurricane status at 1800 UTC that day, followed by an acceleration to the northeast. The storm began to lose deep convection, and was forecast to lose tropical characteristics and become an extratropical cyclone within days. By early on August 29, little thunderstorm activity remained over the western semicircle, and only a band of deep convection persisted to the southeast of the center. Bonnie became extratropical around 1800 UTC on August 30, to the southeast of Newfoundland.
Prior to the storm's arrival in South Carolina, researchers at Clemson University used Bonnie to test a new method of estimating the damage a storm is likely to cause. The test was run through computer models, and projected damage by zipcode. In the state, the South Carolina National Guard put about 1,512 men on active duty, 1,474 being of the Army National Guard. On August 25, the South Carolina Emergency Preparedness Division activated Level 1 operations, the highest of five. That same day, the State Governor declared a State of Emergency, calling for mandatory evacuations of residents easy of U.S. Route 17 in Horry and Georgetown counties. Schools were closed throughout the state. About 200,000 people were evacuated from those counties, of which 120,000 were tourists. In a survey, 12% of respondents in the state took traffic as a significant consideration in deciding if they should evacuate. On the Grand Strand, Bonnie was the first storm where buses were provided to help people evacuate.
A study was performed on the storm in eight counties in North Carolina to determine the cost of evacuation for hurricanes, and included 1029 households. Another study was performed regarding the actions taken during Hurricane Bonnie evacuations in the state. Tourists were interviewed, and it was found that 90% of vacationers who were threatened by the hurricane evacuated, of which 56% went home, 3% stayed in public shelters, 22% stayed with friends or relatives, 3% stayed in hotels and motels, and 16% stayed elsewhere. In total, 58% stayed within North Carolina, 12% went to Virginia, 6% relocated to South Carolina, and 24% stayed in other regions. Most of the evacuees left on August 25; 80% left with their own vehicles, and 18% used rental transportation. Officials in the state opened an estimated 100 shelters to accommodate the evacuating tourists and residents.
In Virginia, where 15 jurisdictions declared local emergencies, local governments took action to inform and protect citizens. Residents in mobile home parks, as well as campgrounds, were advised to evacuate, and 13 jurisdictions opened shelters by August 26. State Governor Jim Gilmore declared a State of Emergency, and as a result, the State Emergency Operations Center was activated. Beaches and piers were shut down in Virginia Beach, Hampton, and Gloucester counties, where communities canceled some local events due to the threat of Bonnie. Voluntary evacuations throughout the state were issued, and some hotels reached maximum capacity as a result. Roughly 60 Navy ships were ordered to leave port at Norfolk, and ride out the storm far out to sea. The State of Virginia banned swimming along the coast. As Bonnie progressed northward, a tornado watch was posted for much of eastern Virginia.
One direct death occurred in North Carolin; a young girl was killed when a tree fell on her Currituck County home. Throughout eastern portions of the state, trees and powerlines were downed, and there were reports of structural damage. Numerous docks, piers and bulkheads were either damaged or destroyed, including the Iron Steamer and Indian Beach piers, which both lost large sections to the strong wind and surf. Due to the winds, the Brunswick Community Hospital lost about 3,000 sq. ft. of roof and air conditioner. The storm left about 500,000 people in the state without electric power. In some areas, vegetative and structural debris accumulated in piles several feet deep; it is reported that thick underbrush prevented the debris from traveling further inland. Wilmington "turned into a disaster zone", with flooded highways, and downed trees laying across roadways. Crop, particularly tobacco, damage was extensive. Initial damage estimates of up to $2 billion (1998 USD) were primarily to such crop losses. According to then-governor Jim Hunt, "You fly along and don't see much damage to the beach houses, and it's easy to think we didn't have much damage. But then you look at the tobacco in fields and you know the damage has been extensive. Forty-seven of those who failed to evacuate in time sought shelter in the Bald Head Island lighthouse as the worst of the storm bore down. Despite the effects, Bonnie's impact was actually less than originally predicted. Overall, property damage in the state is estimated at $240 million (1998 USD), with significantly higher crop damages.
As the storm moved offshore, outer rainbands affected the Maryland coast with gusts of up to at Ocean City, and waves of . No damage was reported. Light rainfall was also reported northward into Delaware and New Jersey. In addition, up to extended into New York. At Point Pleasant Beach, New Jersey, there were reports of a drowning in rough seas caused by the storm; however, the man was later spotted onshore with his fiance. The two were charged with filing a false police report.
Despite the damage, the name Bonnie was not retired and was re-used in 2004; the name is scheduled to be again in 2010.