"This means that a terrorist attack is a strong possibility and reflects the continuing threat from dissident republican activity," May said.
"As a result of this change, we are working closely with the police and other relevant authorities to ensure appropriate security measures are in place," she said.
The level was substantial when the rating was first published by the MI5 domestic intelligence service in 2010 but was lowered to moderate in 2012.
The threat to Northern Ireland itself, which was riven by three decades of conflict and where there are still strong sectarian tensions despite the signing of a peace agreement in 1998, remains severe.
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The threat from international terrorism to Britain also remains unchanged at severe, meaning an attack is highly likely. It has been at this level since August 2014.
A prison officer in Northern Ireland died of his injuries earlier this year after an explosive device placed under his van detonated in an attack attributed to dissident republicans opposed to the peace process.
A large cache of bomb-making parts and explosives was also found buried in plastic barrels in a forest park in a predominantly unionist area near Larne, 50 kilometres (30 miles) north of Belfast.
Some 3,500 people were killed in a conflict known as The Troubles which largely ended with the landmark 1998 Good Friday peace deal and the decommission of Irish Republican Army weapons.
Tensions remain between pro-British unionists and republicans, who want a united Ireland.