A growing number of Iraqi provinces are refusing entry to internal refugees, the UN refugee agency has warned.
Andrew Harper warned that, with no imminent end to the displacement, Iraq was becoming a "pressure cooker".
The UNHCR says there are 2.2m internal refugees in Iraq, though the Iraqi government says there are half that.
A government spokesman has told the BBC that while dealing with the growing numbers of internally displaced people was a significant problem, only three provinces were refusing access to refugees.
In addition, the UNHCR estimates that 2.2m Iraqis have fled to neighbouring states, particularly Syria and Jordan, since the US-led invasion in 2003.
Mr Harper told the BBC that Iraqi authorities were increasingly overwhelmed by the internal refugee problem - caused not only by violence, but also by social and health problems such as cholera outbreaks.
He said local authorities did not have the resources to cope, and that the governors of at least 11 provinces - out of 18 in the country - had reacted by blocking internal migrants from entering their territory, or denying them food and education if they do get in.
"We are seeing an increasing number of governorates closing their borders or restricting entry to new arrivals," he said.
"And so we have a pressure cooker building up inside Iraq - there is no imminent end to the displacement," he added.
"The possibility for Iraqis to find safety is becoming increasingly restricted. So, where they can move is becoming over-populated and intense."
Mr Harper said the UNHCR had raised the problem with the Iraqi central government, but was told that local authorities had been urged not to turn away Iraqis fleeing other parts of the country.
The millions of refugees fleeing the violence and turmoil in the country, Mr Harper said, were the biggest challenge facing the UNHCR and the international community.
He said the figures were increasing on average by up to 100,000 every month.
In Diyala province, aid workers have said they have been unable to reach thousands of families, including displaced refugees, because of the security situation.
The huge displacement of people is cementing the fragmentation of the country, says the BBC's Arab affairs analyst Magdi Abdelhadi, with local authorities ignoring Baghdad by refusing to shelter refugees.
That will make national reconciliation even more difficult to achieve, he says.
There are also fears that the ramshackle refugee camps that today dot the Iraqi landscape are a breeding ground for violence, our correspondent adds.
Mr Harper's warning comes at a time when Iraq's neighbours have more or less closed their borders to refugees, saying they can no longer cope with the strain.
WHERE IRAQIS HAVE FLED TO
Gulf states: 200,000
Internally displaced: 2,250,000
© 2007 BBC News