"I'm worried about his [Russian President Vladimir Putin's] pressure on the Baltics, the way he is testing NATO," Fallon told the Telegraph on Wednesday.
On Thursday, Latvian Defense Minister Raimonds Vejonis said the country did not see any threat from Russia.
"NATO has to be ready for any kind of aggression from Russia whatever form it takes. NATO is getting ready," Fallon said.
The UK defense chief also mentioned increased Russian air activity around Britain, which he said has been unprecedented since the height of the Cold War.
Earlier this month, Fallon said the United Kingdom would send four Typhoon fighter jets to aid NATO air policing over the Baltic states.
In addition, Britain vowed to provide NATO's Rapid Response Force (RRF), stationed close to Russia in Eastern Europe, with over 1,000 troops. It has been recently announced that the spearhead force will be increased more than twofold, to 30,000 military personnel.
Following Russia's reunification with Crimea last March and the start of an internal armed conflict in Ukraine's southeast in April, NATO began boosting its military presence near Russia's borders, including in the Baltic states.