Mrs May pledged to reduce the numbers claiming in Britain while taking in the "most vulnerable" refugees from conflict zones around the world.
She also said high migration made a "cohesive society" impossible.
Her speech was criticised by business groups, with the Institute of Directors attacking its "irresponsible rhetoric".
Net migration into the UK currently stands at a record high, reaching 330,000 in the year to March.
The Home Secretary told the Conservative Party conference Britain "does not need" net migration at current levels, saying the net economic effect was "close to zero" at best.
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