Bahrain summoned Iran's charge d'affaires on Monday in protest at "interference" by Tehran in the internal affairs of the Gulf kingdom, the foreign ministry said.
Tehran's envoy Mahdi Islami was summoned "to address his country's interference in the kingdom's internal affairs through deliberately attributing false information to Bahraini officials," the ministry said.
Undersecretary Hamad al-Amer told Iran's envoy that his country's "conduct incites sedition and sectarianism" in Shiite-majority Bahrain which is ruled by the Sunni Al-Khalifa dynasty, it said.
He also dismissed "claims" in Iranian media that Manama had requested Iranian mediation in domestic affairs as "false".
"Any interference in Bahrain's domestic affairs through mediation or other methods, as well as in dealing with its citizens, is unacceptable and would be an encroachment on its sovereignty and independence," he said.
The protest followed a meeting between Iran's representative and the spiritual leader of the Shiite opposition, Ayatollah Issa Qassem.
The main Shiite opposition, Al-Wefaq, said in a statement that the meeting between Islami and Qassem took place in response to a Bahraini demand for mediation.
Iran has been supportive of protests by Bahrain's Shiite against the Saudi-backed monarchy, sparking a diplomatic crisis not only with the small kingdom but also with the area's economic powerhouse.
Bahrain came under strong criticism from international human rights groups over last year's crackdown on protests.
An international panel commissioned by King Hamad to probe the government's clampdown found that excessive force and torture had been used against protesters and detainees.
But it said there was no proof of a link between Iran and anti-regime protests last year.
Bahrain, home to the US Fifth Fleet and strategically situated across the Gulf from Iran, has continued to witness sporadic demonstrations, mostly outside the capital Manama, since it crushed the protest movement in March 2011.