On Saturday, Colombia's military announced its troops had killed Raul Reyes, a Farc leader, during an attack on a jungle camp in Ecuador, a blow to the group behind Latin America's oldest insurgency.
Chavez quickly warned Colombia against doing the same in Venezuela because he would interpret it as a "cause for war".
But Colombia denied it had failed to respect Ecuador's sovereignty and said Saturday's operation was a response to fire from across the border.
"Colombia has not violated any sovereignty, only acted in accordance with the principal of legitimate defense," the Colombian government said in a statement.
"The terrorists, among them Raul Reyes, were used to killing in Colombia and invading the neighboring countries to hide. Many times Colombia has suffered these situations, which we are obliged to avoid to defend our citizens," it said.
Chavez has been in a diplomatic dispute with Alvaro Uribe, his Colombian counterpart and his ideological opposite, for months because of the Venezuelan's mediation efforts to free hostages held by Farc fighters.
"Not only is he [Colombia's president] a liar ... he leads a band of criminals from his palace"
Uribe has accused Chavez of using the mediation to meddle in Colombian affairs.
Chavez accused Uribe of lying about the details of the operation that killed Reyes, calling it a "cowardly assassination" of a "good revolutionary".
Chavez called Uribe a "criminal", saying: "Not only is he a liar, a mafia boss, a paramilitary who leads a narco-government and leads a government that is a lackey of the United States ... he leads a band of criminals from his palace."
Ecuador has also withdrawn its ambassador in protest and questioned if Uribe lied when he initially explained that the strike was in response to cross-border fire.
Uribe has complained before that Farc fighters take refuge in frontier areas, though neighbours say his troops are not doing enough to prevent the conflict spilling across the borders.