Chris Coleman’s side have moved up 12 places after their 1-0 European Qualifiers win over Belgium in Cardiff last month, while England have risen six places from 15th.
Wales’ victory over Belgium was their sixth win in 11 matches, and they have lost only once – in a 2-0 friendly defeat to Holland – in that sequence.
It caps a remarkable rise for a team which was languishing at 117th on the list less than four years ago under previous manager Gary Speed.
They were the sixth-lowest European nation at that stage but now sit in front of former world and European champions Spain, Italy and France.
Results against Belgium and Israel in particular have played a part in the Welsh surge, given wins otherwise in recent times have come against Macedonia, Iceland, Andorra and Cyprus.
Their good form and consequent latest placing means they will be in the pot of top seeds for the 2018 World Cup qualifying draw when it is made in St Petersburg on July 25.
Elsewhere, Argentina are the new highest-ranked nation despite their Copa America final defeat to Chile, who are 11th directly behind Wales.
Germany drop to second while Scotland, their European qualifying rivals, also slip a place to 29th. Northern Ireland are 37th and the Republic of Ireland are 52nd.