A boycott by firms worried about damaging their image could cause serious harm to the company's advertising.
"We know advertisers don't want their ads next to content that doesn't align with their values," Google's chief business officer Philipp Schindler said in a post on the internet giant's blog.
"So starting today, we're taking a tougher stance on hateful, offensive and derogatory content."
The move came a day after an apology by a senior Google executive following the British government and a handful of top firms including Marks and Spencer and HSBC bank pulling their adverts after they appeared alongside extremist content on its internet platforms, particularly its video-sharing site YouTube.
The British arm of Havas, one of the world's top advertising agencies that manages the accounts of numerous leading firms, suspended such advertising last week.
Others to pull the plug, temporarily at least, are the BBC, Guardian newspaper group and McDonalds UK.
The British government put its YouTube advertising on hold on Monday, saying "it is totally unacceptable that taxpayer-funded advertising has appeared next to inappropriate internet content -- and that message was conveyed very clearly to Google."
A Marks and Spencer spokesman said: "In order to ensure brand safety, we are pausing activity across Google platforms whilst the matter is worked through."
The Times reported last week that BBC programmes were promoted alongside videos posted by American white supremacist and former Ku Klux Klan member David Duke as well as videos by Wagdi Ghoneim, an Islamist preacher banned from the UK for inciting hatred.
The newspaper said an analysis it conducted found more than 200 anti-Semitic videos, and that Google failed to remove six of them within the 24-hour period mandated by the EU when it anonymously signalled their presence.
Schindler said in his post that Google "is taking a hard look at our existing community guidelines to determine what content is allowed on" YouTube, and will tighten safeguards to ensure that ads show up only against legitimate creators.
A boycott by firms worried about damaging their image could cause serious harm to Google as advertising makes up the overwhelming majority of the internet giant's revenue.
Unaudited figures from Google's parent company Alphabet indicated that advertising accounted for nearly 86 percent of the company's $26.1 billion in revenues in the final quarter of last year.
Schindler said Google acknowledged that companies have brand guidelines which dictate where and when they want their ads to appear, and that it wants to give them more control to do that.
"In the coming days and months, we're introducing new tools for advertisers to more easily and consistently manage where their ads appear across YouTube and the web," said Schindler.
He pledged Google would hire significant numbers of people and harness its latest developments in artificial intelligence and machine learning to review questionable content for advertising.
He added the firm would be able to resolve cases of advertising appearing alongside inappropriate content "in less than a few hours".