The growing range of bomb-making techniques employed by dissident republicans is of great concern, police chiefs have warned.
Increasing co-operation among the renegade groups opposed to the Northern Ireland peace process is also a serious worry, officers from both sides of the border said.
Police Service of Northern Ireland Assistant Chief Constable Judith Gillespie and Garda Commissioner Fachtna Murphy provided the update on the dissident threat at a cross-border conference in Belfast where they were joined by Stormont justice minister David Ford and his counterpart in the Republic Dermot Ahern.
Mrs Gillespie said the size of the groups is not the most significant element.
"It's probably more appropriate to talk about their capability and we certainly are concerned at a growing capability," she said.
"We have seen an increase in technical expertise and the successful detonation of improvised explosive devices, the range of techniques they are now using - and that is of great concern.
"And we have also seen groups working more closely together than we have seen in the past and that's also of serious concern."
Dissidents have been responsible for a number of car bomb attacks against security force targets in Northern Ireland this year.
Mrs Gillespie's warning comes weeks after the security services raised the threat level of a dissident attack in mainland UK from moderate to substantial.
Mr Murphy said garda intelligence corroborated the decision to upgrade the warning level.