The Times Higher Education World University Rankings 2014-15 shows Cambridge rising to 5th place. However, Oxford came in at third.
California Institute of Technology takes the top spot for the fourth consecutive year, with Harvard (second), Stanford (fourth), MIT (sixth) and Princeton, University of California, Berkley, Yale University and Chicago taking 7th, 8th and joint 9th places respectively.
According to Times Higher Education, there is evidence of a loss of power for American institutions, even though they make up seven of the top ten. The rankings placed three British universities in the top ten.
Both the US and UK lost three universities from the top 200 since last year, with 74 and 29 institutions in the rankings respectively.
Asia has seen a rise with 24 universities now in the world top 200 and includes the University of Tokyo and National University of Singapore in the top 25.
Phil Baty, THE rankings editor, commented: "Western universities, in many cases starved of vital public funding, are losing ground".
The THE rankings come after the QS World University Rankings placed MIT first, ahead of Cambridge and Imperial.