Update at 9:59
Duane Winslow, Yellowstone County director of disaster and emergency services, said there's been no severe damage reported so far from the tornado spotted in the Billings area.
Once funnel clouds were spotted south of town, Winslow sounded the sirens in the Heights.
The country music group Sugarland was preforming tonight at the Rimrock Auto Arena at MetraPark. Winslow said they were contacting the venue every five minutes during the height of the tornado warning.
"At any moment they were ready to pull the plug on the concert," he said. "But just kind of slid on by. We got lucky."
The concert finished without incident.
Update at 9:45 p.m.:
Ryegate Area has flooding on Highway 12. Law enforcement is reporting 6 to 12 inches of water on the road with debris in some areas. Severe driving conditions are in place, emergency travel only.
Update at 9:35 p.m.:
The National Weather Service reports that a tornado was spotted at 9:27 p.m. 11 miles north of the Billings Heights over Highway 87 moving at 30 mph.
Damage from the the tornado was reported 9 miles southwest of Acton.
Update at 9:15 p.m.:
A tornado was seen west of the Billings Logan Inter nation Airport just before 9 p.m. and tornado sirens are sounding in the Heights.
"At 8:59 p.m. trained spotters reported a tornado 4 miles west of the Billings Airport along Highway 3 moving northwest at 30 mph.," the National Weather Service reported. "This tornado has reported damage 9 miles southwest of Molt."
Emergency dispatchers have reported that a tornado touched down outside Laurel at about 8:40 p.m.
Roger Haugrud Jr. was at his father's house five miles east of Molt, and it has just begun hailing there at 8:50 p.m. "I just heard a thump on the roof," he said.
But the "big wall cloud" full of rain was skirting south of their property, moving east quickly, he said. "It's going to be real nasty," he said.
It's been a stormy night for southeastern Montana. A funnel cloud was spotted north of Columbus near Rapelje Road in Stillwater County shortly before 8 p.m. along with 2-inch hail stones.
Another funnel cloud was spotted southeast of Molt at 8:13 p.m. and another six mile east of Big Timber at 8:08. No damage or touchdown has been reported.
And west central Yellowstone County is under a tornado warning.
The tornado warning now is in effect for Yellowstone, Stillwater, Wheatland and Golden Valley counties until 8:45 p.m., the National Weather Service announced.
"Doppler radar indicated a severe thunderstorm capable of producing a tornado 8 miles southwest of Ryegate or 27 miles southeast of Harlowton moving northeast at 10 mph," the weather service reported.
The Tornado watch still stands for the rest of southeastern Montana.
"A strong storm system will move into the area this afternoon and combine with a very moist unstable atmosphere to produce strong to severe thunderstorms across the area through tonight," read a warning posted on the service's website.
The tornado watch is in effect until 1 a.m. Tuesday. The counties affected are Big Horn, Carbon, Musselshell, Park, Rosebud, Sweet Grass, Treasure and Yellowstone.
Forecasters are warning residents that flash floods are also possible, along with hail and strong winds.