Only New Zealand, Australia and South Africa sit above them in the IRB standings after they overtook England, who slip to fifth.
Their current position is their joint highest since the rankings system began in 2003 and shows just how much progress has been made as Wales continue to build towards the 2015 World Cup.
Wales sat as low as 10th after an early exit from the 2007 World Cup but a third Grand Slam in eight seasons and a semi-final showing at the last global gathering in New Zealand has seen them rise considerably this season.
Wales have been ranked fourth once before - after the opening round of the 2009 RBS 6 Nations when they scored four tries against the Scots at Murrayfield.
Elsewhere, Argentina's late win over France ensured they move above the French into sixth position, while Scotland's second successive victory this summer sees them promoted ahead of Tonga into 10th. Ireland remain in eighth, while Samoa are ninth.
The Lions' opponents next summer, Australia, remain in second prior to the third Test with Wales and the forthcoming Rugby Championship.
Retaining their Tri Nations crown in the newly-extended format would see them close the gap on New Zealand at the top of the table, although the deficit is currently close to a daunting five points - more than the total separating Australia from South Africa, Wales and England.
The IRB rankings take on extra significance this year as the draw for the next World Cup will take ranking positions into account as of December 3 - the day the draw takes place in London.
The 12 automatically-qualified nations will be split into three bands of four teams, with teams one to four being drawn into different pools and the same happening for teams five to eight and nine to 12.
The team ranked fourth in five-and-a-half months' time would therefore most likely avoid playing the All Blacks, Springboks and Wallabies until the knockout stages.
For the full list of IRB rankings, please click here