The UK has 34 universities in the Times Higher Education ranking of the world's top 200 institutions.
Oxford climbs to second place, while Cambridge and Imperial College London also make the top 10 in fourth and eighth places respectively.
Keeping the top spot for the fifth consecutive year is the California Institute of Technology in the US.
Europe has a record number of universities in the world top 200, with 105 compared to 87 last year.
The tables rank universities worldwide on measures like teaching, research and international outlook - for example numbers of overseas students and staff.
The majority of UK universities have moved up this year, some - for example Warwick, St Andrews and Exeter - by a significant margin.
There is good news for Reading, Dundee and Newcastle, re-establishing their places in the top 200 after slipping out last year.
However, four universities - Manchester, York, Sussex and Royal Holloway, London - have slipped to lower positions in the tables, compared with last year when there were only 29 UK institutions in the top 200.
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