Jens Stoltenberg, head of the military alliance, said Russan leader Vladimir Putin has put 13 more submarines into active service since 2014.
The submarine build-up includes one converted ballistic missile submarine capable of despatching smaller research vessels.
Mr Stoltenberg told German media: “Russia has massively invested in its marine capability, especially in submarines.
“Russia’s submarine activity is now at its highest level since the Cold War.
“The Russians are operating all over the Atlantic. They are also operating closer to our shores.”
His warning will spark growing fears about the ability of the West to defend itself from a possible Russian attack.
Tensions between Moscow and Nato have dramatically escalated since Russia controversially annexed Crimea in 2014.
Nato officials fear the Kremlin could tap into underwater communication cables which link Europe and North America.
In response, the alliance is set to re-establish a command post, shuttered after the Cold War, to help secure the North Atlantic.
Mr Stoltenberg added: “After the Cold War ended, Nato reduced its marine capabilities, especially to fight submarines.
“We’re a transatlantic alliance, and for that reason we have to be able to transport troops and equipment across the Atlantic.
“For that, we need secure and open sea routes.”
His alarming comments came as Rear Admiral Andrew Lennon, Nato’s submarine forces commander, also raised fears about the Kremlin’s naval wing.
He said: ‘We are now seeing Russian underwater activity in the vicinity of undersea cables that I don’t believe we have ever seen.
“Russia is clearly taking an interest in Nato and Nato nations’ undersea infrastructure.”
Additional reporting by Maria Ortega