The country's foreign ministry said the US leader's rhetoric was "totally unacceptable" and insisted Pakistan's intelligence service provided evidence that helped Washington trace the al Qaeda leader.
"The foreign secretary called in the US CdA [chargé d'affaires] ambassador Paul Jones to register a strong protest on the unwarranted and unsubstantiated allegations made against Pakistan," the ministry said in a statement.
Mr Trump told Fox News Sunday Bin Laden had been living "beautifully" next to a Pakistani military academy in "what I guess they considered a nice mansion".
He added: “Everybody in Pakistan knew he was there and we give Pakistan $1.3bn (£1bn) a year, and they don’t tell him?”
Mr Trump doubled down on his claims later on Twitter.
"We paid Pakistan Billions of Dollars & they never told us he was living there. Fools!" he wrote. "We no longer pay Pakistan the $Billions because they would take our money and do nothing for us, Bin Laden being a prime example."
Pakistan's prime minister Imran Khan immediately hit back on the social media platform, tweeting that Pakistan had suffered 75,000 casualties and lost $123bn (£96bn) in America's wars in the Middle East.
"Trump’s false assertions add insult to the injury Pak has suffered in US WoT [War on Terror] in terms of lives lost & destabilised & economic costs," the former cricketer wrote.
"He needs to be informed abt (sic) historical facts. Pak has suffered enough fighting US's war. Now we will do what is best for our people & our interests."
Washington and Kabul have long accused Islamabad of harbouring militants — a charge it denies.
US commandos killed Bin Laden in a secret 2011 raid in Pakistan. Islamabad denies it knew his whereabouts prior to the raid.
Additional reporting by AP