She had suffered a mild stroke while on holiday on the Caribbean island of Mustique.
"The Princess is now resting at King Edward VII Hospital in London after her overnight flight from Barbados," a palace spokesman said.
"She is expected to remain at the hospital into next week whilst further tests and treatment are carried out.
"No further bulletins will be issued this week."
A scheduled British Airways flight returned the Queen's sister to the UK. It arrived at Gatwick Airport shortly before 0700 GMT on Thursday.
The Princess, 67, was accompanied on the eight-hour journey by a specialist doctor who ensured her condition remained stable.
She flew first class, the costs borne by her private medical insurance.
London facilities
On arrival at Gatwick, the Princess was taken by car to the hospital in central London.
She is undergoing tests there, conducted by top neurologists and cardiologists, to monitor her condition.
Although the medical treatment in the Caribbean was thought to be good, it is understood the Princess's doctors were anxious for her to return to London where better facilities are available.
The Princess had tests in a Barbados hospital after suffering the stroke on Monday night on the nearby island of Mustique, where she was being entertained by friends.
She was flown by air ambulance from Mustique to Barbados, and from there to Britain. She was able to walk to the aircraft and sat up normally during the flight.
The Princess, who is 11th in line to the throne, travels regularly to Mustique where she has a holiday home.
The Queen, her ex-husband Lord Snowdon and her two children, Viscount Linley and Lady Sarah Armstrong-Jones, have been informed and are keeping in close touch with doctors.
Health problems
Princess Margaret has been dogged by ill-health in recent years.
She was admitted to hospital in January 1985 for an operation when part of her lung was removed.
The section was said to be "innocent", or non-malignant, but it was the first of a series of warnings about her deteriorating health.
Despite the scare, an attempt to give up smoking after the operation failed and she was back on cigarettes within a few months, although she cut down from 60 a day to 30.
She was able to continue her work as a member of the Royal Family following surgery.
Princess Margaret also suffered a nervous breakdown in 1974, just two years before her marriage to photographer Lord Snowdon came to an end. They had been together for 16 years.
In May 1992 she had to cancel several days of engagements with a "feverish cold", and in late November with a "feverish infection".
Despite the illness, she managed to attend the wedding of the Princess Royal and Commander Tim Laurence in Scotland in December 1992.
On January 3, 1993, Princess Margaret was admitted to the King Edward VII Hospital, London, with pneumonia. She was reportedly taken ill while staying with friends outside London.
Her last public appearance was earlier this month in London when she visited the Queen Mother who was staying in a London hospital after a hip replacement.
Stroke: the killer that can be beaten
(24 Feb 98 | UK)
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