Oxford University has been ranked first in an international league table for the fourth year in a row.
The annual Times Higher Education world rankings put Cambridge in third place and Imperial College London in tenth.
But there is a warning from the compilers of the rankings that other UK universities are "struggling to hold their own" against global rivals.
They warn Germany is "poised to overtake" the UK in having the most top universities in Europe.
The rankings show Oxford once again named as the best university in the world, ahead of a US university - the California Institute of Technology - in second place.
US universities continue to dominate the rankings, taking seven of the top 10 places and 60 out of the top 200.
Asian university systems are catching up - with China and Japan continuing to perform strongly in the rankings.
Iran's universities are among the "biggest climbers" in this year's league table.
The full list is of 1,300 universities in 92 countries, with the rankings taking into account teaching quality, the volume and reputation of research, citations of research, income from industry and international links.
An analysis accompanying the rankings says that the UK's so-called "golden triangle" - Oxford, Cambridge and London universities - continues to be very successful.
But it warns that this is "masking" a relative decline for other UK universities, while German universities are rapidly improving in the league table.
Since 2016, the number of UK universities in the top 200 has fallen from 34 to 28, while the number of German universities has risen by three to 23.
The analysis from the Times Higher Education says this could reflect higher levels of investment being put into Germany's university system.
It also warns that UK universities could fall further behind Germany in funding if they lose access to EU research partnerships after Brexit.
"If the UK starts to withdraw from the international stage, its position in the upper echelons of the rankings will suffer," says Phil Baty of the Times Higher Education rankings.
The vice-chancellor of Oxford University, Louise Richardson, said: "Oxford's success is in large part due to our research collaborations with other excellent universities around the world and we remain determined both to deepen and to expand these partnerships, whatever Brexit brings."