Australia's terrorism alert level has been raised from medium to high.
The change announced by Prime Minister Tony Abbott on Friday means a terrorist attack is now considered "likely".
He stressed it did not mean a terrorist attack was imminent.
"We have no specific intelligence of particular plots," he told reporters in Melbourne.
"What we do have is intelligence that there are people with the intent and the capability to mount attacks."
The move was foreshadowed by ASIO director-general David Irvine earlier this week amid fears Australians returning from the battlefields of Syria and Iraq could pose a danger.
The decision to raise the threat level was based on an accumulation of indicators, Mr Abbott said.
They include the number of Australians in the Middle East fighting with and supporting terrorist groups, those returning from there having fought with terrorist groups and the people in Australia who are known to be supporting these terrorists groups.
Mr Abbott said the increased threat level would not make a difference in the daily lives of the vast majority of Australians.
However, they will notice more security at airports, ports, military bases, government buildings and large public events.
"But I also want people to be reassured that we do have highly capable security and intelligence service ... highly capable police forces right around the country," he said.
State premiers and Opposition Leader Bill Shorten have been briefed about the increased threat level.
Acting Australian Federal Police commissioner Andrew Colvin said he wanted people to be more aware of the threat, but insisted they could also be reassured.
"While we're asking for increased vigilance from the community we certainly want to assure the community that there is no need to be unnecessarily concerned," he said.
"We want them to go about their normal business as they would on any other day."
The public should not expect to see significant changes in the ways police operate.
Mr Irvine, who is stepping down as ASIO head this week, reiterated there were between 60 and 70 Australians fighting for extremist groups like the Islamic State.
Mr Abbott wants Australians, especially those attending footy finals during the next few weeks, to go about their lives as normal.
"We certainly want people to enjoy the football if their teams are lucky enough to be in the grand final," he said.
But they will notice additional security at grounds and more police than would otherwise be the case.
"Normal life in Australia can and must go on."
Mr Abbott said Australians needed to be aware that there were people who wished and were preparing to do them harm.
But Australia's security, intelligence and police organisations were "smarter than terrorists and would-be terrorists and are one step ahead of them and their malice".
"The best place for some of those people if they've broken our laws is in a maximum security prison."
Mr Abbott denied the decision to raise the threat level was linked to the government's likely support of a US-led coalition that will seek to destroy the extremist Islamic State group in Syria and Iraq.
Mr Irvine said ASIO's decision was based on expert advice provided to it over a long period of time.
"It was taken independently of any decisions that the government might make in relation to interventions or whatever in the Middle East," he said.
