The Oxbridge institutions just managed to stay in the top five of the 100 Times Higher Education World Reputation Rankings, but both have moved down two places since last year.
The University of Bristol and Durham University have fallen out of the top 100, bringing the UK's total number of universities in the rankings to 10 for 2016.
Britain is second only to the United States for the number of universities making an appearance this year, with Harvard at the top of the list for the sixth year in a row.
Phil Baty, rankings editor for Times Higher Education, TES' sister publication, said the UK's drop-off came as Asian universities moved up in the rankings, and he questioned whether funding cuts in the UK had contributed.
He said: "The UK will have to ensure that it can still draw in talent and investment from across the world and it does not lose its position at the heart of higher education's global elite."
Challenge from Asia
Mr Baty said six universities, four in the US as well as Oxford and Cambridge, have dominated the top half of the rankings for the past five years, but added that other countries are making gains.
He said: "Outside this tiny super group, the global higher education world is changing, and some leading lights in the US and UK, for example, household names, have lost ground, while universities in China, Hong Kong, Japan and South Korea are all making progress. We now have a Chinese university in the world top 20 for the first time, and another right behind it in the top 30."
The 2016 rankings are based on a survey carried out between January 2016 and March 2016, which received a total of 10,323 responses from 133 countries.
Here is a list of the UK universities in the top 100 and their rankings:
- University of Cambridge, 4
- University of Oxford, 5
- Imperial College London, 15
- University College London, 20
- London School of Economics and Political Science, 24
- University of Edinburgh, 38
- King's College London, 43
- University of Manchester, 49
- London Business School, 81-90
- University of Warwick, 81-90 Want to keep up with the latest education news and opinion? Follow TES on Twitter and like TES on Facebook