The Massachusetts Institute of Technology (MIT) is now ranked as the world's best college, overtaking the historical British institution for the top spot.
Cambridge, which placed number one last year, is now second after MIT.
Six out of the top ten institutions in the table compiled by QS World University Rankings are American.
Harvard, which held the top spot for six years between 2004 and 2009, is ranked third ahead of British universities, UCL and Oxford.
University College London climbed from number seven last year to number four in the new rankings, placing it above Oxford University.
The QS World University Rankings are compiled using six indicators: academic reputation, employer reputation, faculty/student ratio, citations per faculty, international faculty ration and international student ratio. The results are based on surveys of over 46,000 academics and 28,000 employers.
The proportion of international students at an institution are viewed as an indicator of the college's diversity and international attractiveness.
John O'Leary, the editor of the Times Good University Guide, told the Times newspaper: 'It is vital that British universities maintain their positions among the leaders in the world both for research and the recruitment of international students.
'Their own finances depend on it and both contribute large sums to the national economy.'
Last week London Metropolitan University announced it would take urgent legal action after it was stripped of its rights to admit foreign students.
The UK Border Agency revoked the institution's licence to sponsor international students after it found more than a quarter of a sample of London Metropolitan students did not have permission to stay in the country.
Around 2,600 foreign students at the university now have until December 1 to find an alternative course or arrange to leave the UK.
London Metropolitan said it had reviewed the evidence compiled by UKBA and that it challenged the outcome in the 'strongest possible terms'.
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