A historian says it is likely the former prime minister saw the term in a hymn written by Charles Wesley.
According to The Telegraph, Chris Collins, a historian at the Margaret Thatcher Foundation, said the hymn was a "more plausible and personal source" than the Enoch Powell speech that was previously credited with the phrase.
He added: "It is a phrase which would have been deep-rooted in her from her youth."
The hymn's lyrics include the phrase: "But worse than all my foes I find, the enemy within".
Baroness Thatcher used the term 'enemy within' in reference to trade unions.
It is claimed that she knew many hymns by heart.