Passengers arriving in the UK from Luxembourg from Friday will have to isolate for 14 days after the country was taken off the quarantine-free list.
The government said there had been a "consistent increase" in Covid-19 cases in the country since the end of June.
More than 120,000 Britons visit Luxembourg each year but the Foreign Office now advises against all but essential travel there.
It comes after quarantine for Spain was reimposed on Sunday.
In advice published on Thursday, the Foreign Office said it was not telling Britons already in Luxembourg to leave. Instead it said UK travellers should "follow the advice of the local authorities".
It said data from the Joint Biosecurity Centre and Public Health England had "indicated a significant change in both the level and pace of confirmed cases of coronavirus in Luxembourg".
Transport Secretary Grant Shapps - who is self-isolating after returning from Spain - said in a tweet: "Unfortunately the latest Luxembourg data shows an increase in Covid-19 cases meaning the country will be removed from the travel exemptions list.
A senior government source told the BBC that Belgium would stay on the quarantine-free list - for the moment - but case numbers would continue to be monitored.
Earlier it was announced that people who test positive for coronavirus or show symptoms in the UK must now self-isolate for at least 10 days, rather than seven.
The change, announced by the UK's chief medical officers, comes as ministers try to avoid a resurgence of the virus.
On Thursday, a further 38 people in the UK died, bringing the total number of Covid-19 associated deaths to 45,999.
And 846 cases were reported - the highest number of cases in a day for a month.