There are fears the vote could trigger widespread violence if the indigenous majority in Bolivia supporting Morales intensify protests against it.
Stakes are high, with the country's military also warning they viewed the referendum as a "threat" to the nation's territorial integrity.
Within minutes of voting beginning, one rural outdoor polling station set up in the town of Santa Juliana, 140 kilometers (90 miles) north of the province's main city of Santa Cruz, was destroyed by an angry group of indigenous residents, local television showed.
There were reports of dirt road blocks set up by Indians around the town and other remote communities to prevent access to election workers.
The proposal in Santa Cruz, which lies in Bolivia's eastern lowlands, is on whether to adopt statutes that would give authorities control over their province and the right to create their own security force.
The issues are key because the region sits atop the country's biggest gas fields and acts as Bolivia's economic motor.
Pre-vote surveys suggest up to 70 percent of the province's 930,000 voters will back the autonomy move.
Three other provinces are to hold their own autonomy votes next month, and another two are thinking of following suit.
Santa Cruz has deployed 1,000 of its lightly armed municipal police officers to ensure security in the 235 polling stations that are to close at 4:00 pm (1200 GMT to 2000 GMT). Initial exit poll data are expected around 6:00 pm.
The government has dispatched hundreds of national police to the province, but with orders they not patrol the voting posts.
Morales has called the referendum unconstitutional and an attempt to split Bolivia.
The 47-year-old leader, an admirer of Cuba's revolution and leftist Venezuelan President Hugo Chavez, has vowed to ignore the result.
Chavez late Saturday sent a message of support, calling Morales "a great patriot" under menace from "the empire" -- his typical term for the United States, which he and Morales accuse of meddling in leftleaning Latin American nations.
Amid the crisis, the Bolivian president has been defiantly pushing on with his hardcore socialist agenda, which has fueled resentment in Santa Cruz and the other opposition-run provinces and prompted their autonomy moves.
Morales's program includes rewriting the constitution to give more land and national wealth to the country's indigenous Indians -- of which he is one -- and nationalizing foreign-owned firms.
That is anathema to the big ranchers and company chiefs in the lowlands, who resent an "indigenization" of their economy.
If all lowland provinces declare autonomy, the country -- comprised of nine provinces in total -- would be split between the eastern half, and the poorer western Andes mountains.
There were fears that clashes could erupt Sunday between referendum supporters and rural groups backing Morales.
Santa Cruz governor Ruben Costas has called on voters to "not be swayed by provocation" from the government and asserted that there was no reason for violence.
Racist currents run deep in the crisis, however.
The inhabitants of Santa Cruz are essentially of European descent, and many of whom view with disdain the Indians who make up 60 percent of the national population but who are a minority on the tropical plains.
Late Saturday, a leader of a pro-Morales peasant organization said the group had begun a blockade of roads leading to Santa Cruz.
"We held a meeting and decided that we will not allow this referendum to take place," explained Venancio Cortez Mendez, leader of the Peasant Union of San Julian. "We will not become accomplices of attempts to divide Bolivia."
The leader of a powerful indigenous rural group, Fidel Surco, said during a protest by 5,000 indigenous protesters in Santa Cruz on Friday that "the responsibility for a bloodbath" would rest with the province's authorities.
© 2008 Agence France Presse