The United Kingdom boasts nearly one in 10 of the top 800 institutions in this year's World University Rankings.
The University of Oxford is in second place in the Times Higher Education's latest global league table, while the University of Cambridge and Imperial College London also make the top 10 in fourth and eighth places respectively.
The UK has seen an improvement on last year's results, but it also came with a warning that its long-term performance could be affected by continued cuts in higher education funding and immigration measures causing difficulties for overseas students.
UK institutions have the second highest proportion of international students among the top 200.
The 12th edition of the rankings sees the UK with 78 universities in the top 800, making it second only to the United States.
The university rated number one in the world is California Institute of Technology for the fifth year in a row.
London mayor Boris Johnson said he was "incredibly proud" to see four of the capital's universities in the top 30, its best performance to date.
The UK also has 34 institutions in the top 200, an improvement on last year's 29.
It sees Cardiff University and Queen's University Belfast both make their first appearance, while the University of Reading, University of Dundee and Newcastle University appear after losing their top 200 positions last year.
The majority of UK universities have moved up the rankings this year, some - such as the University of Warwick, University of St Andrews and the University of Exeter - considerably so.
But five - the University of Manchester, University of York, University of Leeds, University of Sussex and Royal Holloway, University of London - have slipped down.
Phil Baty, editor of the Times Higher Education World University Rankings, said: "The United Kingdom is a stand-out performer in this year's rankings, boasting an impressive 78 institutions overall, with 34 of these sitting in the top 200.
"The University of Oxford, the highest-ranked UK institution, is world number two.
"It appears the UK's position in the rankings has benefited from the fact that the country's research excellence framework (REF) assessment took place in the middle of the World University Ranking's period of assessment.
"It will be no coincidence that many of the top universities in the REF - University College London, King's College London, Imperial College London and the universities of Oxford and Cambridge - are also star performers in this list.
"However, despite the UK's success, its continued cuts in higher education funding - the Higher Education Funding Council for England received a £150 million budget slash this year - and series of immigration measures affecting overseas students, will hinder its performance in the long run.
"Many of the country's European rivals, such as Germany, Switzerland and the Netherlands, are also performing well, but are less hindered by funding cuts and more welcoming for international students.
"The UK will have to work hard to ensure its higher education spending and immigration policies do not hinder its place in the World University Rankings."
Twenty-nine new countries have entries this year, including Indonesia, Ghana, Nigeria, Bangladesh, Latvia, Qatar and Ukraine.
While the US remains the world leader when it comes to elite universities, its dominance has been eroded this year, with six of the top 10 universities compared to seven last year, and 39 of the top 100 compared to 45 last year.
There are more European universities in the world top 200 than ever before, while there was a more mixed picture for Asia, with Japan and South Korea falling back this year and China remaining steady.
Nevertheless, Japan is in third place of universities represented overall, with 41 appearing in the top 800, while China has 37, Korea and Taiwan both have 24, and India has 17.
Mr Baty said the rankings "apply rigorous standards, using tough global benchmarks across all of a global research university's key missions - teaching, research, knowledge transfer and international outlook".
"The top 800 list represents just 4% of the world's higher education institutions, so we congratulate all institutions who have made this year's list."
Mr Johnson said: "I'm incredibly proud that four of London's universities are in the top 30 worldwide according to this survey. The capital continues to be the global leader in education, innovating and inspiring top talent from both across the country and overseas."
Universities Minister Jo Johnson said: "It is great to see the UK is second only to the US for the number of world-class universities in the top 80.
"These rankings confirm the world-class standing of our higher education sector. Our reforms will ensure our universities continue to compete with the very best internationally and deliver high-quality teaching to students at home."
Nicola Dandridge, chief executive of Universities UK, said: "This table, and other rankings, suggest that the UK continues to possess, by some margin, one of the strongest university systems in the world.
"What is clear, however, is that if we want to maintain this leading position, we must start matching our competitors' increased investment in higher education. We should also be presenting a welcoming climate for genuine international students and academics and ensuring that visa and immigration rules and procedures are proportionate."
1. California Institute of Technology, US
2. University of Oxford, UK
3. Stanford University, US
4. University of Cambridge, UK
5. Massachusetts Institute of Technology, US
6. Harvard University, US
7. Princeton University, US
8. Imperial College London, UK
9. ETH Zürich – Swiss Federal Institute of Technology Zurich, Switzerland
10. University of Chicago, US
11. Johns Hopkins University, US
12. Yale University, US
13. University of California, Berkeley, US
14. University College London, UK
15. Columbia University, US
16. University of California, Los Angeles, US
17. University of Pennsylvania, US
18. Cornell University, US
19. University of Toronto, Canada
20. Duke University, US
Imperial College London Photo: Alamy
21. University of Michigan, US
22. Carnegie Mellon University, US
23. London School of Economics and Political Science, UK
24. University of Edinburgh, UK
25. Northwestern University, US
26. National University of Singapore, Singapore
27. King’s College London, UK
28. Karolinska Institute, Sweden
29. LMU Munich, Germany
30. New York University US
31. École Polytechnique Fédérale de Lausanne, Switzerland
32. University of Washington, US
33. University of Melbourne, Australia
34. University of British Columbia, Canada
35. KU Leuven, Belgium
36. University of Illinois at Urbana-Champaign, US
37. Heidelberg University, Germany
38. McGill University, Canada
=39. University of California, San Diego, US
=39. University of California, Santa Barbara, US
41. Georgia Institute of Technology, US
LSE has been based at its current site since 1902. King George V laid the foundation stone of the Old Building in 1920.
42. Peking University, China
43. University of Tokyo, Japan
=44. University of California, Davis, US
=44. University of Hong Kong, Hong Kong
46. University of Texas at Austin, US
=47. Tsinghua University, China
=47. Wageningen University and Research Center, Netherlands
49. Humboldt University of Berlin, Germany
50. University of Wisconsin-Madison, US
51. Brown University, US
52. Australian National University, Australia
53. Technical University of Munich, Germany
54. École Normale Supérieure, France
55. Nanyang Technological University, Singapore
=56. University of Manchester, UK
=56. University of Sydney, Australia
58. University of Amsterdam, Netherlands
59. Hong Kong University of Science and Technology, Hong Kong
=60. University of Queensland, Australia
=60. Washington University in St Louis, US
62. Utrecht University, Netherlands
63. University of North Carolina at Chapel Hill, US
64. Boston University, US
=65. Delft University of Technology, Netherlands
=65. University of Minnesota, US
67. Leiden University, Netherlands
68. University of Southern California, US
69. University of Bristol, UK
70. Durham University, UK
71. Erasmus University Rotterdam, Netherlands
72. Free University of Berlin, Germany
73. Monash University, Australia
74. University of Groningen, Netherlands
75. Pennsylvania State University, US
=76. University of Glasgow, UK
=76. University of Helsinki, Finland
78. University of Tübingen, Germany
79. University of Pittsburgh, US
80. University of Warwick, UK
81. Uppsala University, Sweden
=82. University of Copenhagen, Denmark
=82. University of New South Wales, Australia
84. University of Freiburg, Germany
85. Seoul National University Korea, Republic of
86. University of St Andrews, UK
87. Vanderbilt University, US
=88. Kyoto University, Japan
=88. Maastricht University, Netherlands
=90. Emory University, US
=90. Lund University, Sweden
=90. Ohio State University, US
93. University of Exeter, UK
=94. University of Bonn, Germany
=94. Georgetown University, US
=94. McMaster University, Canada
97. University of Sheffield, UK
98. Queen Mary University of London, UK
=99. University of Göttingen, Germany
=99. Michigan State University, US
=101. University of Basel, Switzerland
=101. École Polytechnique, France
=101. Rice University, US