A Buckingham Palace spokesman said the monarch's planned visit to Rome this week had been called off. The British Queen hasn't made an overseas trip since October 2011.
Known for her robust health and devotion to duty, Britain's head of state rarely misses engagements.
"The Queen is being assessed at King Edward VII's Hospital in London after experiencing symptoms of gastroenteritis. As a precaution, all official engagements this week will be either postponed or cancelled," the palace spokesman said.
He added that the monarch was in "good spirits" and was otherwise in "good health".
"This is a precautionary measure," the spokesman stressed.
"She was not taken into hospital immediately after feeling the symptoms.
"This is simply to enable doctors to better assess her."
The Queen was reported to have been well enough earlier Sunday to present an award to a member of staff for her long service and also to attend a chapel service in Windsor.
Broadcasters reported the monarch would remain in hospital under observation for about two days, and would likely be placed on a drip in order to combat dehydration.
It was also reported that she would not be taking visitors in order to minimise publicity.
Prime Minister David Cameron on Sunday issued a statement saying: "We wish the Queen well and wish her a speedy recovery."
After coming down Friday with gastroenteritis -- an infection of the stomach and bowel with symptoms commonly including vomiting, diarrhoea and dehydration -- the sovereign missed celebrations in Swansea on Saturday to mark St. David's Day, the national day of Wales.
Instead of that engagement, she had been resting at Windsor Castle, west of London, where she and her husband Prince Philip usually spend the weekend.
The fact that she was then taken to the royals' regular hospital in central London suggests her condition did not warrant finding a hospital close to Windsor.
In December, her grandson Prince William's pregnant wife Catherine spent three days at the private hospital with acute morning sickness.
A nurse at the hospital was found hanged after taking a hoax call from two Australian radio presenters posing as the queen and William's father Prince Charles, which led to details of Catherine's condition being made public.
Police officers were stationed outside the hospital entrance on Sunday.
Queen Elizabeth was due to visit the Royal Navy frigate HMS Lancaster in the east London docklands on Tuesday.
A reception for British and European Union lawmakers at Buckingham Palace later this week will go ahead as planned, and will be attended by other members of the royal family.
The sovereign and Prince Philip were then due to visit Rome on Wednesday and Thursday, where they were to meet Italian President Giorgio Napolitano.
They were scheduled to receive a ceremonial welcome and attend a private lunch, before visiting ancient monument the Pantheon.
In a statement published on his website, the Italian president wished the monarch a speedy recovery and thanked her for her attempts to visit him in Rome before he leaves his post in mid-May.
Christopher Hawkey, from Nottingham University's faculty of medicine and health sciences, said Sunday's events provided little cause for alarm.
"Not everyone can keep up with oral hydration, so it is pretty routine to go to hospital and have a drip and wait for the thing to pass and keep yourself hydrated," he explained to the Daily Telegraph.
Queen Elizabeth was last admitted to hospital 10 years ago.
She had an operation at King Edward VII's Hospital to remove cartilage from her left knee on December 12, 2003 and had some benign facial lesions removed at the same time.
She was last forced to pull out of an investiture ceremony -- where she presents honours including knighthoods -- in October last year due to a bad back.
The monarch celebrated her diamond jubilee in 2012, marking her 60 years on the throne. This year further ceremonies will be held to mark the six decades since her 1953 coronation.