The Foreign Minister of the United Arab Emirates Anwar Mohammed Gargash said in a statement that the decision to recall its ambassador Sultan Rashed Alkaitoob had been taken because of Wallström's "strong statements against Saudi Arabia and its judicial system".
He added that "these statements violate the principle of sovereignty upon which the normal relations between countries are based".
The Swedish ambassador was also called to the foreign ministry in the UAE to receive a formal criticism of the Swedish minister's comments.
"We regret this of course, our relations to the UAE are good and we want to cultivate and develop them," Wallström's press secretary Erik Boman told Swedish tabloid Aftonbladet.
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Following Saudi Arabia's decision to recall its ambassador a week ago, the move is likely to put further pressure on Sweden's relationship with the Arab League, which has been under strain in recent weeks.
Per Jönsson, a middle east expert based at Sweden's Foreign Policy Institute, told news wire TT on Wednesday: "If this continues, Sweden will be alienated by half the Arab League. It will be the most interesting to see what Egypt does. It's a great and important trade partner."
Sweden’s decided to limit military ties with Saudi Arabia days after accusing the oil rich country of blocking Wallström from speaking at an Arab League meeting.
Her cancelled remarks, published by the Swedish foreign ministry, did not mention Saudi Arabia but stressed women's and human rights.
However the Arab country has reacted strongly to the Nordic nation’s shifting approach, recalling its ambassador to Sweden and accusing Sweden of "flagrant interference in internal affairs”.
While the move was widely praised by human rights campaigners, as the diplomatic row unfolded, 31 business people submitted a debate article to Swedish newspaper Dagens Nyheter, warning that a government decision to halt its military agreement with the Saudis could damage Swedish exports to the Arab world.
Wallström has rarely commented on Saudi Arabia but in January she slammed the kingdom's treatment of blogger Raef Badawi, who had been sentenced to 1,000 lashes and 10 years in prison for insulting Islam.