The municipal meteorological stations issued the city's first orange fog warning and data shows that air quality has hit 500, the index's highest and most dangerous level possible.
The monitoring center said readings for airborne particles are also extremely high.
"These figures represent extremely bad pollution. Pollutants have gradually accumulated over the course of recent windless days, making the air quality even worse," Zhu Tong, a professor from the college of environmental sciences and engineering at Peking University said.
Xinhua said wind will blow away the smog Wednesday.
Officials said Beijing implemented its emergency response plan for hazardous pollution, issued last year, for the first time Sunday.
Xinhua said the plan calls for construction sites to limit activity, limitations on vehicle usage and less time outside for school children.