World and European champions Spain returned to the top with a 3-2 friendly win over Chile followed by a 6-0 thrashing of Liechtenstein in a Euro 2012 qualifier earlier this month.
They replaced the Netherlands who, under the complicated points system, dropped to second despite beating San Marino 11-0 at home and Finland 2-0 away in Euro 2012 qualifiers.
Germany stayed third and Copa America champions Uruguay climbed to fourth, a new high for the South Americans after a 3-2 friendly win over Ukraine.
Brazil are down to seventh after a 1-0 friendly win over Ghana in London and a 0-0 draw away to Argentina. It is their lowest ranking since August 1993 when they dropped to eighth, their worst-ever position.
The 2014 World Cup hosts have been rebuilding their team under Mano Menezes but have struggled to find the right formula.
England drop from fourth to eighth with Portugal and Italy rising above them.
Rankings (last month's positions in brackets)
1. (2) Spain
2. (1) Netherlands
3. (3) Germany
4. (5) Uruguay
5. (8) Portugal
6. (7) Italy
7. (6) Brazil
8. (4) England
9. (10) Croatia
10. (9) Argentina
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