The Cambridge-based start-up allows consumers to monitor, control and automate a range of services in the home, such as heating and energy use, online or via a smartphone.
The tie-up comes at a time when AlertMe is developing energy efficiency programs, which Britsh Gas will utilise.
During its second round of investment, AlertMe raised £15m. Other investors included Good Energies and Index Ventures.
AlertMe said the partnership with British Gas positions it as the strategic partner as the energy provider plans to roll out two million smart meters by 2012.
Phil Bentley, managing director at British Gas said: "AlertMe's innovative product portfolio is a great addition to British Gas’s current service offering, and will provide our customers with a range of new, easy-to-use tools to reduce their energy consumption and cut their fuel bills."
British Gas will now hold a seat on the AlertMe board.