London is among one of several locations the company is considering, but no decisions have been made, the source said.
It was not immediately clear what other locations are under consideration. But it has hired aggressively in California this year, including poaching Kevin Mayer, a former Walt Disney Co executive, to be TikTok's chief executive. He is based in the United States.
TikTok is facing heavy scrutiny in Washington over suspicions China could force the company to turn over user data. TikTok is owned by China-based ByteDance.
The source said the company is largely focused on its issues in the United States over the last few weeks, but has not ruled out London as a potential location for its new headquarters. TikTok is expected to "significantly" increase the size of its workforce in London and other key locations outside of China over the next several years, the source said.
The Sunday Times reported hTiktok has broken off talks with the UK government to open a global headquarters in Britain.
A source said Tiktok was still in discussions with Britain's government.