Putin's most prominent critic claims he is no longer considered a flight risk but is now deemed an extremist and a terrorist.
Alexei Navalny has claimed his prison status has been altered and that he is now on a terrorist watch list, but he is no longer considered a flight risk.
The jailed Russian opposition figure said on social media that he had been summoned before a commission that voted unanimously for the change.
President Putin's most prominent domestic critic is serving a two-and-a-half-year sentence for fraud. He says the charges were politically motivated to halt his challenge to the Kremlin.
Russian authorities have opened a new criminal case against Navalny that could see him stay in jail for another decade.
Neither the Kremlin nor the Russian prison authorities have confirmed the dissident's change of status.
Navalny shrugged off the development, welcoming the prospect of fewer nighttime checkups by guards as he is no longer deemed to be likely to escape.
"I was afraid they would demand that I kiss portraits of Putin," he said in the post, published with the help of his lawyers.
"It's just that there is now a sign over my bunk that I am a terrorist."
A Moscow court rejected an action by Navalny's lawyers on Monday against prosecutors over the blocking of his YouTube channel. It had advised people on how to vote in September's parliamentary election that was won by the pro-Putin United Russia party.
In June a court ruled the activities of Navalny's movement to be extremist. Many of his allies have had their homes raided or movement restricted, while some have fled abroad.
On Monday Alexei Navalny praised the Russian journalist Dmitry Muratov for winning the Nobel Peace Prize. Some of the jailed dissident's supporters have said he would have been a more deserving winner, while Muratov has also said he would have given it to Navalny.