Rebecca Kitteridge's comments come as troops are set deploy to Iraq on a joint training mission with Australia.
More New Zealanders were being monitored over the past year because of their links to Islamic State, she told Radio New Zealand.
She said she was more worried now about the potential of a terrorist attack here than when she first started her job just 11 months ago.
The use of social media to encourage people to mount attacks on their own countries was increasing, Ms Kitteridge told RNZ.
"I think it's the first time that we've seen a terrorist organisation actually actively trying to recruit people to commit attacks internationally."
The SIS had a constant 30 to 40 people on its watchlist that it was most interested in, but she said the number had increased to nearer the top of that range.
NZME.
