An episode of Patriot Act with Hasan Minhaj included the American-born Muslim comic criticising Saudi Arabia after the murder of journalist Jamal Khashoggi in the Saudi consulate in Istanbul in October.
Mr Khashoggi was a fierce critic of the Saudi rulers.
The 33-year-old attacked Crown Prince Mohammed bin Salman, saying: "He has been getting away with autocratic s**t like this for years with almost no blowback from the international community.
"It blows my mind that it took the killing of a Washington Post journalist for everyone to go, 'Oh, I guess he's really not a reformer.'"
Minhaj also criticised the Saudi-led war in Yemen, which he described as "the worst of everything happening in one place".
In a statement, the streaming service said: "We strongly support artistic freedom worldwide and removed this episode only in Saudi Arabia after we had received a valid legal request and to comply with local law."
The removal of the episode came after a complaint from the Saudi Communications and Information Technology Commission, which said the episode violated the cyber crime law, according to the Financial Times.
Minhaj, who was the featured speaker at the White House Correspondents' Dinner in 2017, has not commented on the move by Netflix.
Sarah Leah Whitson of Human Rights Watch wrote on Twitter: "Netflix's claim to support artistic freedom means nothing if it bows to demands of government officials said he believe in no freedom for their citizens - not artistic, not political, not comedic."
More from Saudi Arabia
The episode can still be seen outside Saudi Arabia - and in the kingdom on YouTube.
Last year, Reporters Without Borders ranked Saudi Arabia as 169 out of 180 countries for press freedom, saying that it would "probably fall even lower" in 2019 "because of the gravity of the violence and abuses of all kinds against journalists".