Islam Times reports from AFP: A US embassy spokesman said ambassador Gary Locke was called to a meeting on Wednesday.
Beijing has warned that Washington's plan will seriously harm military and security ties between the two powers.
"The wrongdoing by the US side will inevitably undermine bilateral relations as well as exchanges and cooperation in military and security areas," Chinese vice Foreign Minister Zhang Zhijun said.
China urges the US to respect Beijing's stance on the issue of selling arms to Taiwan and calls for the cancellation of the "wrong decision," the Chinese diplomat added.
"China strongly urges the United States to be fully aware of the high sensitivity and serious harm of the issue, seriously treat the solemn stance of China, honor its commitment and immediately cancel the wrong decision," Zhijun said.
The Chinese official said Taiwan issue was connected to China's territorial integrity and described Washington's decision as "grave interference" in the Asian power's internal affairs.
Chinese ambassador to the US Zhang Yesui has also lodged a strong protest on behalf of the Chinese government in Washington.
The Pentagon informed the US Congress on Wednesday that it planned to upgrade Taiwan's aging F-16 fighter jets in a deal worth $5.3 billion.
Some US senators and members of the House of Representatives have since May written to President Barack Obama to urge him to sell 66 late-model F-16 C/D planes to Taiwan to meet an earlier request made by Taipei in 2007.
Taiwan's defense ministry said it would continue efforts for the purchase of the 66 jets to replace its existing fighters that are more than 30 years old.
The upgrade plan will increase capabilities of Taiwan's F-16 A/B fighter jets to the same level as the more advanced F-16 C/Ds sought by Taipei, US officials say.
The deal which will reportedly take 12 years to complete includes equipment, parts, training and logistical support, the Pentagon said.
The proposed upgrade will give Taiwan's existing fleet of 146 US-made F-16 A/Bs a significant boost, Taiwan's defense ministry said.