Cambridge has topped a league table of the world's best universities, with Harvard and MIT ranked second and third.
The annual QS World University Rankings remains dominated by US institutions, which took 13 of the top 20 places.
There are five British universities in the top 20 – Oxford ranks fifth, Imperial sixth, UCL seventh and Edinburgh 20th. The only university in the top 20 which is not from the English speaking world is the Swiss Federal Institute of Technology, in Zurich, at 18. The highest ranking Asian universities are Hong Kong at 22, Tokyo at 25, and the National University of Singapore at 28. King Saud University, in Saudi Arabia, made the top 200 for the first time. At 200, it was the highest rated institution in the Arab world.
It is the second year running that Cambridge University has taken the top spot.
Ben Sowter, QS head of research, said: "The gap between Cambridge and Harvard is very small, but Cambridge's superior student/faculty ratio helped tip the balance. Individual attention is one of the key attractions of the Oxbridge tutorial system."
Government and private funding for technology-focused research is eroding the dominance of traditional comprehensive universities, compilers of the rankings said. The average age of the top 100 institutions has dropped by seven years since 2010, reflecting the emergence of newer specialist institutions, QS said.
Nine UK universities were in the top 50, and 17 in the top 100.
Sowter said: "This year's QS rankings show that the worst effects of the funding cuts have yet to be felt by UK universities.
"However, pre-emptive redundancies and increased student intake have led to worse student to faculty ratios relative to their international peers.
"Of the 37 UK universities in the top 300, 34 fared worse in this measure than in 2010."
Tuition fee information has been published for the first time alongside the 2011 world rankings.
It suggests that UK higher education is still cheaper compared to many US universities, but other international institutions may offer better value for money.
Universities in the Netherlands, including Amsterdam University (63rd place) Utrecht (80) and Leiden (88), are all in the top 100 and offer English-language courses for less than £2,000 per year, QS said.
The university rankings are based on a mix of factors including academic reputation, employability of graduates, citations, and the staff-student ratio.