The announcement by the Crisis Centre of the Belgian Interior Ministry is advising the public to avoid places where large groups gather -- such as concerts, sporting events, airports and train stations -- and comply with security checks. The rest of the nation will maintain its current terror level.
If people take the terror alert seriously, Brussels will be "shut down tomorrow," CNN terrorism analyst Paul Cruickshank said.
"It suggests they have something specific and credible at the intelligence front pointing them in the direction that there may be a terrorist plot in the works," he said. "It also suggests they don't have a handle on it, that they don't know where these plotters are or where they're coming from."
The increase in alert level for Brussels comes as authorities investigating last week's terror attacks in Paris conduct raids in Belgium as they work to identify and take down the network of terrorists behind the carnage.
Salah Abdeslam, 26, is the subject of an international search warrant. He was last seen driving toward the Belgian border when police stopped and questioned him a few hours after the attacks, not knowing that he was allegedly involved. His whereabouts are unknown.
ISIL has claimed responsibility for the Paris attacks.
Abdeslam is one of two brothers allegedly involved in last week's coordinated attacks at the Bataclan concert hall, outside the French national soccer stadium and at restaurants in Paris. Though he's a French national, he was born in Belgium.
That's one of several connections between this latest attack and Belgium, a country seen as fertile ground for radical recruiters. It's where members of a suspected terror cell waged a deadly gun battle in January with police and where three Americans in August overpowered a radical gunman on a Paris-bound train.
It was also home to suspected ringleader Abdelhamid Abaaoud. He was killed during a dramatic raid that shook the Saint-Denis neighborhood outside Paris and collapsed an entire floor of an apartment building.