"Your action makes a mockery of the rule of law," Mueller wrote in a Friday letter to Scottish Justice Secretary Kenny MacAskill.
"Your action gives comfort to terrorists around the world who now believe that regardless of the quality of the investigation, the conviction by jury after the defendant is given all due process, and sentence appropriate to the crime, the terrorist will be freed by one man's exercise of "'compassion.'"
Mueller's letter came in response to MacAskill's decision Thursday to the release Abdelbaset Ali Mohmed al-Megrahi, the former Libyan intelligence agent convicted of the bombing of Pan Am Flight 103 over Lockerbie, Scotland, in 1988.
The bombing killed 270 people, most of them Americans.
MacAskill said he released al-Megrahi out of "compassion" because he has prostate cancer and is expected to live only a few months.
Mueller, who was the top U.S. Justice Department official who oversaw the investigation of the bombing, said in the letter MacAskill's action was "as inexplicable as it is detrimental to the cause of justice."
President Barack Obama and other administration officials also have criticized the decision to release al-Megrahi.