The Malaysian foreign minister, Anifah Aman, said in a statement that his ministry was seeking clarification from Singapore's high commissioner to Malaysia.
"If those allegations are eventually proven, it is certainly a serious matter that the government of Malaysia strongly rejects and abhors," Anifah said. He said spying against a good friend and neighbour was unacceptable.
Anifah's ministry earlier this month protested to US and Australian embassy officials over accusations that their diplomatic missions house surveillance equipment used to collect electronic communications.
The Sydney Morning Herald report said an NSA map published by Dutch newspaper NRC Handelsblad this week confirmed that Singapore played a role in helping the US and other intelligence partners tap undersea cables.
Similar spying allegations rocked relations between Indonesia and Australia this month, with Jakarta recalling its ambassador, downgrading relations and suspending co-operation on people-trafficking after claims of Australian tapping the phones of Indonesia's president, his wife and eight Indonesian ministers and officials in 2009.