A major poll by Redbridge and Accent Research showed Pauline Hanson's One Nation could win as many as 59 seats if an election was held today, while the coalition could be reduced to as few as seven.
Mr Turnbull said the Liberals had tried to emulate One Nation in a bid to claw back voters, but had only emboldened the minor party.
"This constant move to the populist right is only building up One Nation. They are literally feeding that political party, because every time they copy their policies, they're validating their approach," he told ABC Radio on Monday.
"The Liberal Party's got to steer back to the centre and focus on economic management. It's got to focus on things like innovation, on productivity, on growing the economy, and stay out of the culture wars."
But he warned that approach may not be possible under its new federal president Tony Abbott, who was elected unopposed on the weekend.
"He's clearly a masochist ... he's got a strong commitment to politics, so good on him," Mr Turnbull said.
"If you look at what Tony has been saying and what (former chief of staff) Peta Credlin has been saying ... they're basically arguing that the Liberal Party's mistake has been not being right wing enough."
Liberals Leader Angus Taylor sought to downplay the poll, saying the coalition was still best placed to be the opposition in parliament to Labor.
"We are the ones fighting the Labor Party every day. I am out there every day fighting the Labor Party. That is our one focus," he told reporters in Canberra.
"Other parties can fight whoever they like, that's up to them."
One Nation MP Barnaby Joyce, who left the coalition in 2025, said the party was not getting carried away by the result.
''We don't let it go to our head, obviously. Nemesis follows hubris, so we will just say that's an indicator, not a vote, and we'll keep doing our hard work," he told Sky News.
"What it does show is an indication not only of the people's belief in One Nation, but their disbelief now in the circumstances, political circumstances, that they've had. They want a different approach."
Shadow treasurer Tim Wilson said the Liberals had to do better to ensure they were relevant to voters.
"We've got to make sure that we provide a bold and confident vision for the future of this country because I want people to vote for us to build out a better future for Australia," he told Nine's Today program.
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