Mexico and Peru have both said they will withdraw their ambassadors from Cuba following scathing remarks by the communist state's leader, Fidel Castro.
Castro said Mexico's reputation had 'turned to ashes'.
Mexico, once Cuba's strongest ally in Latin America, accused Havana of interfering in its affairs and said it was expelling the Cuban ambassador.
Peru cited "offensive" remarks made by the Cuban leader in a May Day speech.
President Castro had condemned states which backed a recent United Nations censure of Cuba's human rights record.
"The Peruvian government energetically rejects offensive remarks made by the Cuban head of state with regard to Peru," the foreign ministry in Lima said on Sunday, and warned of "consequences for bilateral relations".
In Mexico City, Foreign Secretary Luis Ernesto Derbez told reporters that diplomatic ties with Havana were being reduced to the level of charges d'affaires following the May Day speech.
Interior Secretary Santiago Creel, who appeared with him at a news conference, said it had also been discovered that Cuban Communist Party members had entered Mexico on diplomatic passports in April and held an unspecified "political reunion" without going through diplomatic channels.
Mr Derbez added that President Vicente Fox's decision to downgrade relations had also been taken after Cuban officials made allegations that the president was trying to discredit a key political rival, Mayor of Mexico City Andres Manuel Lopez Obrador.
He said Mexico had to "conclude that the attitude of the Cuban government has been to meddle directly in internal affairs that are the exclusive domain" of the Mexican government.
Crackdown on dissidents
In his speech to a million-strong rally in Havana, President Castro lashed out at states which had voted against Cuba's human rights record at the UN Human Rights Commission in Geneva in April.
He dismissed all the relevant Latin American governments as weaklings, unable to make their own decisions on foreign policy. He accused them of taking direct instructions from the US.
Mexico's international reputation in particular, he said, had "turned to ashes".
The UN resolution, backed by the US, called on Cuba to "refrain from adopting measures which could jeopardise the fundamental rights, the freedom of expression and the right to due process of its citizens".
New concern over Cuba's treatment of political dissidents surfaced last week when it jailed Juan Carlos Gonzalez Leiva, a blind lawyer, for four years for contempt, public disorder and resisting arrest.