In Southeast Asia, Malaysia trailed only Thailand (6th) and Indonesia (27th).
The rankings were based on a global survey of over 17,000 respondents, who evaluated countries on criteria such as scenic beauty, friendly locals, adventure opportunities, and culinary experiences.
Vietnam, renowned for its UNESCO heritage sites and biosphere reserves, ranked 36th, an improvement of eight places from last year.
Greece was crowned the most beautiful country in the world, followed by New Zealand and Italy.
Malaysia, celebrated for its vibrant cultural diversity, attracted nearly 29 million international visitors last year, making it the most visited destination in Southeast Asia.
In June, it was also named the most loved country in Asia in a survey conducted by American financial website Insider Monkey.