The National Center for Disaster Prevention cited a "significant escalation" in volcanic activity in raising the alert level to Yellow Phase 3, El Universal reported Monday.
More than 2,000 soldiers have been put on standby by the National Defense Secretariat in the event people living closest to the volcano have to be evacuated.
Officials in the states of Puebla and Tlaxcala announced preparations were being made to install shelters.
Tlaxcala officials said 18 communities in the state were considered at risk.
Miguel Angle Mancera, head of the government of the Federal District in which Mexico City is located, said city officials were monitoring the volcano continuously.