The change to his armed forces' rules of engagement came after Syrian forces shot down a Turkish warplane last week.
The warning reflected tensions not only on the Mediterranean coast, where the aircraft was shot down, but on a common land border used by rebels fighting President Bashar al Assad.
Syria said on Sunday it had killed several "terrorists" infiltrating from Turkey.
In Syria itself, Damascus suburbs were gripped by the worst fighting the capital has seen since the uprising against Mr Assad began 16 months ago.
Mr Erdogan, who fell out with Mr Assad after the Syrian leader dismissed his advice to allow democratic reform, said Turkey was no warmonger.
Mr Erdogan said: "Our rational response should not be perceived as weakness, our mild manners do not mean we are a tame lamb.
"Everybody should know that Turkey's wrath is just as strong and devastating as its friendship is valuable."
Nato member states condemned Syria over the incident that resulted in the loss of two airmen.
The cautious wording of a statement demonstrated the fear of Western powers as well as Turkey that armed intervention in Syria could stir a sectarian conflict across the region.
Mr Erdogan said of the change to his country's rules of engagement: "Every military element approaching Turkey from the Syrian border and representing a security risk and danger will be assessed as a military threat and will be treated as a military target."
Turkey hosts the rebel Free Syrian Army (FSA) on its soil, across the border from Syria, and accommodates more than 30,000 refugees – a number Mr Erdogan fears could rise sharply. Rebel soldiers move regularly across the border and defectors muster on Turkish soil.
Fighting has often moved very close to the frontier and could – under the new rules of engagement – draw Turkish military reaction, especially if Syrian forces pursue rebels.
Clashes between rebels and pro-Assad forces are now occurring every day in Syria. Violence gripped the suburbs of Damascus yesterday, activists said. Video published by activists recorded heavy gunfire and explosions.
Syrian and Turkish accounts of the warplane incident differ.
Syria says it had no choice but to shoot the jet down as it entered its air space flying low and at high speed. It found the jet was Turkish only after the engagement. Turkey insists its aircraft entered Syrian air space by mistake.
Mr Erdogan said Syrian military helicopters had violated Turkish airspace on many occasions without reaction. He saw the attack as a deliberate blow.
He said: "Our plane was targeted on purpose, and in a hostile way, and not as a result of a mistake.
"The harassing fire on our Casa-type plane during the search and rescue operations is the most palpable evidence of this intent."
Friday's incident is unlikely to increase Turkey's appetite for an intervention it fears would have unpredictable consequences for Turkey and for a region riven by sectarian division.
However, it has in the past spoken of the possibility of creating humanitarian corridors inside Syria.