With the crucial battle in its second day, Iraqi commanders said progress was being made as fighters pushed on two main fronts against the jihadists' last stronghold in Iraq.
The US military, which is leading a coalition providing air and ground support, said Iraqi forces even looked "ahead of schedule" but senior Western officials warned the battle would be long and difficult.
Advancing in armoured convoys across the dusty plains surrounding Mosul, forces moved into villages defended by pockets of IS fighters after intensive aerial bombardment.
A soldier at a checkpoint nearby said that IS lit the wells on fire to provide cover from air strikes before the town of Qayyarah was retaken in late August. The fires had been burning ever since.
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Heavy smoke was also hanging over Mosul itself as the jihadists burned tyres to shield themselves, resident Abu Saif said.
Speaking to AFP from inside the city, Abu Saif said that while the sounds of air strikes and explosions could be heard coming from outside Mosul, its streets were eerily quiet.
"There is this happiness inside us... Because we feel that we are about to be rescued," he said.
"But we are scared that Daesh (IS) can still carry out acts of revenge against the population."
The long-awaited Mosul offensive was launched on Monday, with some 30,000 federal forces leading Iraq's largest military operation since the 2011 pullout of US troops.
Retaking Mosul would deprive IS of the last major Iraqi city under its control, dealing a fatal blow to the "caliphate" the jihadists declared two years ago after seizing large parts of Iraq and neighbouring Syria.
"Iraqi forces have achieved their goals and even more, but we're careful to stick to the plan and not rush this."
The two main fronts are south of Mosul, where forces are moving from Qayyarah, and east, where another push involving Kurdish peshmerga fighters is under way.
In the south, forces inching forward along the Tigris river were training their sights on a village called Hammam al-Alil, while units east of Mosul were close to Qaraqosh, once Iraq's biggest Christian town.