The change, from level three to four, sets a pretext for possible measures that could follow, such as closing high-risk areas and placing restrictions on domestic travel or public gatherings.
"Thailand has entered a new wave of infections, where new cases will be rising fast," said Kiattiphum Wongrajit, permanent secretary of the health ministry.
"Level four means we may close high-risk places and announce more measures."
The move comes amid a sharp rise in daily infections since the beginning of the year.
Thailand reported 5,775 new cases on Thursday, a 48% rise on the previous day and nearly double the number on Jan. 1.
The Southeast Asian country has vaccinated about 69.1% of an estimated 72 million people living in the country with two doses, but only 10.9% have received booster shots.