According to the issued alert, al-Qaeda and its affiliated organizations are continuing to plan attacks, possibly zeroing in on public transportation systems and other tourist infrastructure.
"U.S. citizens should take every precaution to be aware of their surroundings and to adopt appropriate safety measures to protect themselves when traveling," the department said.
At Los Angeles International Airport on Sunday morning, travelers went about their business as usual despite the alert.
Britain's Foreign Office upgraded its travel advice for France and Germany, warning Britons going to those countries that the threat of terrorism there is high.
German officials said they saw no need to change its risk assessment to the country since there were "still no concrete indications of imminent attacks" there.
British officials said the U.K.'s terrorism threat level remains unchanged at "severe," which means an attack is highly likely.
According to sources, the terror plotters have moved through the "surveillance" stage and have received a go-ahead to strike.
Public areas crowded with tourists are of particular concern. The terror suspects reportedly include eight Germans and two British brothers, who may be of Pakistani or Afghan decent. Pakistani officials said the plan is still in its early stages and that one of the Britons died in a recent CIA missile strike.
Officials have said earlier that Osama bin Laden had approved or "blessed" the attack plan. If bin Laden is behind the terror plots, it would be his most operational role since Sept. 11, 2001.
There are hundreds of thousands of Americans in Europe at any one time, including tourists, students and businesspeople. For insurance and liability reasons, many U.S. college and university study-abroad programs will not send students to countries for where a warning is in effect.
Despite the alert, Americans traveling to Europe are saying they're not too worried.
"The only thing I was afraid of was flights being canceled, but apparently everything is running pretty good. Things are a little bit exaggerated, but what can you do?" said Frederico Reimers, a Texan who is visiting France.
"The government knows there's this threat. It's an increasing problem. So what they really want to do is to protect themselves that they warned you. We're not hearing that there's any specific information in there about targets, locations, timing or any real valuable advice to Americans about what they can do," said former Homeland Security adviser Frances Townsend.
Intelligence and law enforcement officials claim they have information that terror teams could launch commando-style attacks similar to the 2008 attack on Mumbai, where 175 people were killed after 10 men went on a shooting spree for three days.
Although no specific targets have been named, ABC News reports that al-Qaeda may be focusing on England, France, Germany, and possibly Italy and Belgium.
The Los Angeles Lakers and Minnesota Timberwolves are in London for their European preseason tour. NBA officials said teams currently in Europe will go on with their planned activities, but the league has promised to take "appropriate" security measures.
The Associated Press contributed to this report.