The second episode of Patriot Act With Hasan Minhaj was removed following a legal demand, which reportedly said it violated a Saudi anti-cybercrime law.
It features Minhaj mocking the actions of Saudi officials following the murder of the journalist Jamal Khashoggi and criticising the crown prince.
Netflix said it backed artistic freedom but had to "comply with local law".
Despite the move, people in Saudi Arabia can still watch the episode on the show's YouTube channel.
Khashoggi, a prominent journalist and critic of Saudi Crown Prince Mohammed bin Salman, was killed in the Saudi consulate in Istanbul on 2 October.
Saudi officials initially insisted the 59-year-old had left the building alive. But they later acknowledged that he was murdered by a team of Saudi agents and that his body was dismembered before being disposed of elsewhere.
What did Hasan Minjaj say?
"Just a few months ago, Crown Prince Mohammed bin Salman... was hailed as the reformer the Arab World needed. But the revelations about Khashoggi's killing have shattered that image," said Minhaj in the episode of Patriot Act removed by Netflix.
"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."
The prince has been heavily criticised for escalating a crackdown on dissenting voices, pursuing a war in neighbouring Yemen that has caused a humanitarian catastrophe, and
starting a diplomatic dispute with Qatar.
Netflix confirmed in a statement that it had removed the episode last week.
The streaming service defended its decision saying: "We strongly support artistic freedom worldwide and only removed this episode in Saudi Arabia after we had received a valid legal demand - and to comply with local law".
Article 6 of the law prohibits the "production, preparation, transmission or storage of material impinging on public order, religious values, public morals and privacy" on the internet.
Khashoggi's editor at The Washington Post, Karen Attiah, tweeted that Netflix's decision was "quite outrageous".
Human Rights Watch's Middle East director, Sarah Leah Whitson, said the streaming service's claim to support artistic freedom "means nothing if it bows to demands of government officials who believe in no freedom for their citizens".
Reporters Without Borders, a press freedom watchdog, ranked Saudi Arabia 169th out of 180 countries for press freedom in a list published in October.
Netflix is available in 190 countries around the world, with more than 137 million people counted as subscribers.
However, the streaming service's licensing deals prevent its content from being made available everywhere.
People in the US have the biggest pool of TV shows and films to choose from - 1081 and 4579 respectively. Those in Saudi Arabia can access 176 shows and 468 films.