"Due to increased security concerns, all staff in our Yemen embassy have been temporarily withdrawn, and the embassy will remain closed until staff are able to return," an FCO statement said today.
The British government flew the embassy staff back to the UK overnight.
The Foreign and Commonwealth Office (FCO) had already announced the closure of its embassy in Sanaa until the end of the festival of Eid amid a global terror alert.
"There is a very high threat of kidnap from armed tribes, criminals and terrorists. Be particularly vigilant during Ramadan, when tensions could be heightened," the FCO travel advisory for the country reads.
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Officials are describing the latest action as a "drawdown", rather than an evacuation.
Similar closures of British missions have recently taken place in Benghazi and Damascus.
Yemeni intelligence services had discovered that tens of al-Qaeda members had arrived in the Yemeni capital of Sanaa over the past few days in preparation for the implementation of a large plot, the BBC reported.
The US had ordered all its citizens in the country to leave following a terror alert over the weekend.
Twenty two US embassies and consulates in the Middle East and North Africa were also closed on Sunday.
Intelligence from telephone conversations last week between the head of al-Qaeda, Ayman al Zawahiri, and the head of its affiliate in Yemen, Nasser al Wuhayshi, reportedly revealed plans about a major attack.
Meanwhile, international intelligence agency Interpol said countries should show "increased vigilance", after hundreds of terrorists in Iraq, Libya, Pakistan and six other countries were freed in prison escapes.