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President Recep Tayyip Erdogan on Saturday warned Greece it would pay a "heavy price" if it continued to "harass" Turkish planes over the Aegean.
"Hey Greece, take a look at history. If you go further, you will pay a heavy price," Erdogan told a rally in the Black Sea region.
Turkey has in recent months complained of what it calls provocative actions by Athens, saying such moves undermine peace efforts.
The two uneasy NATO neighbours have long-standing sea and air boundary disputes which lead to near-daily air force patrols and interception missions mostly around Greek islands near Turkey's coastline.
Athens accuses Ankara of overflying Greek islands.
Turkey says Greece is stationing troops on islands in the Aegean Sea in violation of peace treaties signed after World Wars I and II.
An infuriated Erdogan on Saturday accused Greece of "occupying" the islands.
"We have only one word to tell Greece: Do not forget Izmir (Smyrna in Greek)," Erdogan said, referring to the end of the Greek occupation after Turkish forces entered the city in the Aegean coast in 1922.
"Your occupation of the islands does not bind us," Erdogan said.
"When the time comes, we will do what's necessary. As we say, we may come suddenly one night," he added, using his often-repeated words when he talked about launching an operation into neigbouring Syria.
In June, Turkish Foreign Minister Mevlut Cavusoglu said Ankara would challenge Greece's sovereignty over the islands if it continued to send troops there.
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