"The (Saudi) government has recalled its ambassador in Copenhagen to express its regret and protest the position of the Danish government regarding a matter that has offended Islam and Muslims," a Saudi Foreign Ministry official said on Thursday.
Ambassador Muhammad al-Hujailan was recalled "for discussions", he said, requesting anonymity.
The cartoonist at the Danish Jyllands-Posten daily received death threats after it published 12 caricatures of the prophet of Islam in September.
The images were reprinted in a Norwegian magazine earlier this month, sparking uproar in the Muslim world. Muslims believe that any images of the prophet Muhammad are blasphemous.
Danish Prime Minister Anders Fogh Rasmussen last month refused to agree to a meeting requested by 11 ambassadors of Muslim nations to discuss the controversy.
Rasmussen upheld freedom of expression as a fundamental human right but condemned any action "which tries to demonise certain groups due to their religious or ethnic background".
Arab foreign ministers in December lashed out at Copenhagen, expressing "surprise and indignation" at its reaction, while the International Union of Muslim Scholars threatened to urge a boycott of Danish and Norwegian products.
Danish food giant Arla Foods meanwhile said on Thursday it was being targeted by a boycott in Saudi Arabia because of the publication of the objectionable cartoons.
Arla Foods is Europe's second-largest dairy company and the leading Danish exporter to Saudi Arabia, where it sells an estimated two billion kroner ($328 million) worth of products every year.
"More and more supermarkets are taking our products off their shelves and don't want fresh supplies because consumers no longer want to buy our brand," Arla Foods spokesman Louis Honore told AFP.
"The situation is very serious."
Arla Foods sales staff had been summoned by major Saudi customers who were threatening to stop buying Arla butter and cheeses unless the Danish government officially apologised for the cartoons, he said.