Schools have been urged to close and half of the city's vehicles are to be kept off the roads as the dense smog is set to shroud parts of the Chinese capital until Thursday.
An online notice from the Beijing Municipal Environmental Protection Bureau on Monday said it issued the alert to "protect public health and reduce levels of heavy air pollution".
Authorities blame heavy coal-burning in factories and vehicle emissions for the increase in pollution.
China, the world's biggest carbon emitter, plans to upgrade coal power plants over the next five years to tackle the problem.
It says its emissions will peak by around 2030 before starting to decline.
While emissions standards have been tightened and heavy investments made in solar, wind and other renewable energy, China still depends on coal for more than 60% of its power.
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