Peru has decided to recall its ambassador to Venezuela immediately, accusing Caracas of interfering in the current presidential elections.
The Foreign Ministry said Venezuela had persistently interfered in Peru's affairs in breach of international law.
The decision was also in response to comments by President Hugo Chavez, who openly backed left-wing populist Ollanta Humala in the 9 April poll.
Mr Chavez recently called Mr Humala's opponent Alan Garcia "a thief".
Mr Humala faces the centre-left former President Garcia in a run-off in late May or early June. Mr Chavez has said he will break off relations with Peru if Mr Garcia wins.
The Venezuelan leader's comments apparently came after the Mr Garcia called him and Bolivian President Evo Morales "spoilt children" for criticising Peru's signing of a trade agreement with the US.
Venezuela, Bolivia and Cuba signed their own trade agreement in Havana on Saturday.
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