I would say "on medium heat." Let's say you are warming up some food on a stove, and you set the burner on "medium" setting. Then you are warming up the food on medium heat.

The difference would possibly refer to what is doing the heating. Seeing as you usually heat something on a hotplate, it would be usual to say 'on'. Although you possibly could use 'in' with something like an oven, we usually don't use 'in', and if anything use 'at' instead.

Thank you for the comments :D

On, only "on". Because "heating up in the heat" is grammatically incorrect.

We will be warming it up in medium heat. Incorrect- We will be warming it up on medium heat. Correct