Riyadh's ambassador to the Rights Council, Faisal bin Hassan Trad, "was quietly appointed" in June to head the five-member panel advising the council, meeting in Geneva, said Paris-based Reporters Without Borders (RSF).
"The appointment only came to light today. It has enraged human rights defenders and international human rights organisations worldwide," the watchdog said in a statement.
"This appointment is grotesque," said Alexandra El Khazen, head of RSF's Middle East and North Africa desk.
"It is outrageous that the UN is allowing Saudi Arabia, one of the world's biggest human rights violators, to chair this panel."
The kingdom ranks 164 out of 180 countries in the RSF Press Freedom Index.
Worldwide outrage followed a Saudi court's verdict of 1,000 lashes and 10 years in jail against Saudi blogger Raif Badawi for insulting Islam.
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The Supreme Court upheld that verdict earlier this year, after Badawi received the first 50 lashes of the sentence. The rest of the flogging has not yet been administered.
Badawi is among two professional journalists and seven "citizen-journalists" detained arbitrarily in the kingdom, according to RSF.
Badawi's activist lawyer Walid Abulkhair is behind bars as well.
"The Saudi kingdom's human rights record is disastrous. There are no independent media," the RSF statement said.
"Saudi Arabia has been cracking down harder and harder on online activity since the Arab spring of 2011."
In June, Saudi Arabia responded to foreign criticism of the Badawi case by rejecting "interference" in its internal affairs and describing its judiciary as independent.
Rights groups have also regularly expressed concern about the kingdom's use of the death penalty.