Dominic Raab, the foreign secretary, said the arrest of Rob Macaire was a “flagrant violation of international law’’.
He was detained for more than an hour before being released, the Iranian Tasnim news agency reported.
He is said to have been one of a number of individuals held on suspicion of organising, provoking and directing radical actions.
In a statement, Mr Raab said: “The arrest of our ambassador in Tehran without grounds or explanation is a flagrant violation of international law.
“The Iranian government is at a cross-roads moment. It can continue its march towards pariah status with all the political and economic isolation that entails, or take steps to de-escalate tensions and engage in a diplomatic path forwards.”