A series of strong aftershocks added to the nervousness, although there were no immediate reports of deaths or collapsing buildings.
The shallow 6.8-magnitude quake hit around 116 kilometres (72 miles) north of Mandalay at a depth of just 10 kilometres, the US Geological Survey (USGS) said. It initially put the magnitude of the quake at 7.0.
"I ran from my bed carrying my daughter out to the street. There were many people in the road. Some were shouting and others felt dizzy," Mandalay resident San Yu Kyaw told AFP by telephone.
"People are now scared of more earthquakes. Especially those who live or run businesses in high-rise buildings are desperate and don't know what to do," he said.
The were no immediate reports of casualties but building standards are generally poor in the country formerly known as Burma, one of Asia's most impoverished nations.
The USGS issued a yellow alert, saying "some casualties and damage are possible" but that the impact should be relatively localised.
The quake hit at 7:42 am (0112 GMT) and was followed by two shallow 5.0-magnitude aftershocks within 20 minutes, according to the USGS.
It struck around 572 kilometres east of the Bangladeshi capital of Dhaka, one of the world's biggest cities.
The quake was felt in neighbouring Thailand, including in the capital Bangkok, according to reports on social media websites.
Iy comes little more than a week before US President Barack Obama is due in Myanmar on a historic visit, as the West begins to roll back sanctions to reward a series of dramatic political reforms under President Thein Sein.
Earthquakes are relatively common in Myanmar, which is emerging from decades of military rule under a new quasi-civilian government.
Kyaw Kyaw Lwin, an official at the National Earthquake Information Division in the capital Naypyidaw, said it was the strongest quake in the area since a 6.0-magnitude quake in 1991.
More than 70 people were killed in March 2011 when a powerful 6.8-magnitude quake struck Myanmar near the borders with Thailand and Laos, reducing homes and government buildings to rubble and affecting thousands of people.
Aid workers at the time praised Myanmar's regime for its speedy response to that quake, in contrast to the aftermath of previous disasters to strike the country under the old military junta.