The state department said the jailing of Roy Bennett was a "blatant example" of a lack of the rule of law.
Mr Bennett, an aide to Prime Minister Morgan Tsvangirai, faces trial over an alleged plot kill Mr Mugabe.
Mr Tsvangirai has begun a boycott of his offices and cabinet meetings in protest at Mr Bennett’s imprisonment.
The prime minister’s Movement for Democratic Change party says the charges are politically motivated and untrue.
Analysts say the issue threatens to split the unity government Mr Tsvangirai formed with Mr Mugabe in February.
State department spokesman Robert Wood joined a chorus of international disapproval that has followed Mr Bennett’s jailing.
"Mugabe has to end the harassment of the opposition, including Mr Bennett," he said.
The EU also said it was "deeply concerned" that "politically motivated abuse persists".
Mr Tsvangirai’s spokesman, James Maridadi, said the prime minister had tried to contact Mr Mugabe to discuss the issue, but had failed.
"The Council of Ministers [cabinet meeting] has been cancelled," he told South Africa-based ZimOnline news website.
"The prime minister has suspended his coming to the office until the issue of Senator Bennett is resolved."
Mr Bennett, who is Mr Tsvangirai’s nominee for deputy agriculture minister, is due to stand trial on 19 October on charges of terrorism, insurgency, sabotage and banditry. If convicted he faces a life jail term.
He was initially arrested and jailed in February, on the day ministers in the coalition government were sworn in.
He was released in March but judges revoked his bail on Wednesday.
Mr Bennett, a white farmer whose land was seized under Mr Mugabe’s land reform programme, fled to South Africa in 2006 saying he feared for his life, before returning to serve in the government.