"The Brazilian government condemns the summary rite of dismissal of the leader of Paraguay decided June 22, in which he was not adequately assured of the broad right to a defense," the foreign ministry said in a statement.
"It considers that the procedure adopted compromises the fundamental pillar of democracy, the essential condition for regional integration," it said.
Brazil has recalled its ambassador in Paraguay for consultations, the foreign ministry added.
Lugo resigned after being impeached Friday by a 39-4 vote of the Paraguay Senate over his handling of a June 15 incident in which six police officers and 11 squatters were killed in an armed confrontation.
"The measures to be applied as a result of the rupture of the democratic order in Paraguay are being evaluated with the partners in Mercosur and Unasur, in the light of the democratic commitments in the region," it said.
Mercosur and Unasur are groupings of South American countries.
Brazilian Foreign Minister Antonio Patriota had earlier said sanctions against Paraguay could range from not inviting the new authorities to summits to the freezing of contacts at different levels.
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