"Honduras ignored more than 80 years of friendship between (Taiwan and Honduras) when they sent their foreign minister to China, which has seriously damaged the feelings of our government and people," said a foreign ministry statement.
"We have decided to immediately recall our ambassador in Honduras to express our strong dissatisfaction."
The announcement came as Honduran Foreign Minister Eduardo Enrique Reina was heading to China to hold talks on the establishment of diplomatic relations with Beijing, government officials said.
China considers self-ruled democratic Taiwan as a part of its territory, to be retaken one day -- by force, if necessary.
Last week, Honduran President Xiomara Castro ordered Reina to establish diplomatic relations with China, a move that would sever its ties with Taiwan.
Under Beijing's "One China" principle, no country may maintain official diplomatic relations with both China and Taiwan. Taipei maintains a similar policy, having cut ties in the past with countries that switched recognition to Beijing.
If Honduras does formally switch recognition, it would leave Taiwan with just 13 countries with which it has formal diplomatic ties, having lost several Latin American allies in recent years.
Reina was being accompanied to China by lawmaker Xiomara Zelaya, the daughter of President Castro, three government and diplomatic officials told AFP on condition of anonymity.
The Honduran delegation will meet Chinese Foreign Minister Qin Gang, Minister of the Presidency Rodolfo Pastor told local daily El Heraldo.
Beijing has not confirmed the visit, but on Thursday foreign ministry spokesman Wang Wenbin said China was "ready" to establish ties with Honduras.
"China welcomes the positive remarks made by the Honduran government on developing relations with China and stands ready to establish and develop bilateral relations with Honduras on the basis of equality and mutual respect," said Wang.
Last week, Reina said economic necessity and Taiwan's refusal to increase financial aid to Honduras were behind the decision to establish ties with China.
Honduras is one of the poorest countries in Latin America, with almost 74 percent of its almost 10 million population living in poverty. Reina put the country's internal and external debt at $20 billion, of which $600 million is owed to Taiwan.
The diplomatic switch -- which Castro had promised to make while on the campaign trail -- came weeks after her government announced it was negotiating with China to build a hydroelectric dam.
Addressing questions from lawmakers about reports that Honduras had demanded more aid from Taipei, Taiwan Foreign Minister Joseph Wu said Thursday that his government was not prepared to accept an "unreasonable request".
"I will be frank, we are in a rather difficult situation. We are still trying our best, and we will do our best to the last minute," he said.
"But we will not accept any unreasonable request, from Honduras or any other country, especially if they are opaque."
In a separate statement on the same issue, Taiwan's foreign ministry said the island "will not engage with China in dollar diplomacy".
"(The foreign ministry) would like to once again appeal and remind the Honduran government not to fall into China's debt trap."
Taiwan President Tsai Ing-wen will depart on March 29 on a 10-day trip to shore up ties with two of its remaining allies -- Belize and Guatemala -- and will also stop in the United States while in transit.
On March 7, US House Speaker Kevin McCarthy confirmed that he would meet Tsai in his home state of California, with the US State Department asserting the expected travel was "transit" rather than a "visit".
Beijing has expressed opposition to that meeting.
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