Eyewall replacement cycles led to fluctuations in the hurricane's structure and intensity, but on October 16, Gonzalo peaked with maximum sustained winds of 145 mph (235 km/h).

After Hurricane Fay caused extensive power outages on the island just days before, residents of Bermuda were forced to complete preparations for Gonzalo in haste.

Banks, businesses, schools, and government offices closed in advance of the storm, while the Royal Navy ship HMS Argyll left its post in the Caribbean to provide Bermuda with emergency assistance.

Bermuda Regiment soldiers and sailors from the Argyll took part in initial cleanup and repairs on the territory, and preliminary assessments revealed that the storm did not compare to the devastation of Hurricane Fabian in 2003.

A large storm system involving the remnants of Gonzalo battered the British Isles and central Europe on October 21, killing three people in the United Kingdom and severely hindering transportation.

[7] The eyewall replacement cycle briefly disrupted the storm's core, causing Gonzalo to weaken slightly,[8] but upon completion on the evening of October 15, the system stabilized and resumed intensification.

[9][10] While moving northward early the next day, Gonzalo reached its peak intensity with winds of 145 mph (235 km/h) and a barometric pressure of 940 mbar (hPa; 27.76 inHg).

[12] The hurricane was downgraded to Category 2 as the northern eyewall crossed Bermuda,[13] and about 00:30 UTC on October 18, the center of circulation passed directly over the island, signaling an official landfall.

[17] By 18:00 UTC, Gonzalo had finally succumbed to the cold environment and intense wind shear, completing its transition into a strong extratropical cyclone about 460 mi (740 km) northeast of Cape Race, Newfoundland.

The resultant system brought stormy weather to the British Isles and parts of mainland Europe on October 21,[2] and later contributed to the formation of a large cut-off low.

[18] When Gonzalo first formed, various governments across the eastern Caribbean issued tropical cyclone warnings and watches, extending from Guadeloupe to the coast of Puerto Rico.

[2] Having been affected by the unexpectedly destructive Hurricane Fay just days earlier, residents quickly began preparing for Gonzalo by obtaining emergency supplies and expediting cleanup efforts from the previous storm.

Still completing restoration work after massive outages from Fay, BELCO stationed vehicles and supplies at strategic points on the island to prepare for the next hurricane.

[28] On the morning of October 16, BELCO switched its focus from Fay to Gonzalo, leaving around 1,500 households without power; the remaining affected customers were asked to refrain from calling to report outages.

[30] Public beaches were closed as hurricane swells began to build, and the decision was made to shut down the Causeway early on October 17, based on forecasts of long-duration severe winds.

[39] Further west, Gonzalo caused minor power outages on Saint Kitts and Nevis,[40] while a general 1–2 in (25–51 mm) of rain accompanied wind gusts to 58 mph (93 km/h) on Guadeloupe.

[41] The storm wrecked dozens of boats around Saint Martin, including 22 in Simpson Bay Lagoon, and an elderly man aboard one of the stricken vessels was killed.

[42] The French side of the island incurred relatively little destruction, with scattered roof and window damage,[46] though Orient Beach "was a scene of complete devastation"; several businesses there suffered extensively.

[48][49] Heavy rain on Anguilla flooded the Clayton J. Lloyd International Airport and portions of several districts, qualifying the government for a US$500,000 "excess rainfall" insurance payout.

[50] The eastern and western ends of the island bore the brunt of the storm, facing damage to utility poles, vegetation, and roofs,[40] and public schools did not reopen until October 20 or later.

[40] Gonzalo produced squally weather in parts of Puerto Rico and the Virgin Islands, causing power outages and prompting 20 people to stay in an emergency shelter.

[2][56] The intense winds brought down utility poles and hundreds of trees (likely exacerbated by saturated ground from record rainfall in the months prior), leaving "barely a road" passable.

[77] L.F. Wade International Airport sustained some roof and runway lighting damage,[78][79] and the Bermuda Weather Service building lost a storm shutter and saw water forced inside a communications room.

[95] Offshore, a buoy over the Laurentian fan recorded peak wave heights to 68 ft (21 m),[96] and an oil rig southeast of the storm's center experienced sustained winds of 98 mph (158 km/h).

[98] The extratropical storm complex incorporating the remnants of Gonzalo generated strong winds across the British Isles, especially over Ireland and the northern United Kingdom.

[109] The system halted transportation throughout the region, forcing the cancellation of more than a hundred flights at London Heathrow Airport, grounding ferries, and blocking roads and railways with debris.

[117] In the Bavarian capital of Munich, the storm destroyed a large tin roof measuring over 80 m2 (860 sq ft), parts of which impacted cars and fences on the ground.

[119] Northwesterly gales yielded a storm surge along the country's North Sea coastline,[120] with tides running over 2 m (6 ft 7 in) above normal along the Elbe River at Hamburg.

[116] The upper-level low associated with the hurricane's remnants blanketed parts of the Alps with heavy snowfall, accumulating to several feet,[116] and subsequently fueled torrential rains in the Balkans on October 24 and 25.

Floodwaters caused by estimated rainfall totals nearing 150 mm (6 in) inundated entire villages in southeastern Bulgaria, forcing hundreds to evacuate, and there were widespread disruptions of power and water services.