Critics say bosses should be arrested for allowing a cyber-knifing game in the current climate of teenage stabbings across the country.
Twenty-one teenagers have been murdered in London alone so far this year and the majority of those attacks have involved knives.
People can "shank" each other (a street slang for stab) by simply clicking on the blade in the 'Superpoke!' application, where users can also carry out actions such as spitting, punching and karate chopping.
John Knox, uncle of Rob Knox, the Harry Potter actor who was stabbed to death in May, said the website application was "disgusting" and that the game targeted young thugs who carried knives.
Knox, 57, said: "Why the hell would a social networking site for teenagers put something like this forward?
"If the authorities really want to get tough on knife crime, the CEO or directors of Facebook should be arrested for inciting violence."
Members can use the shank icon on anyone else with a Facebook profile, who will then receive a message saying they have been "shanked".
In a climate of cyber bulling, there are also concerns it could be used to threaten and bully other young users.
Raymond Stewart of anti-crime group Urban Concepts said: "It's appalling. We completely condemn it."
Users of the site have differing opinions.
One member said: "While I'm sure the creators of this didn't think about it to 'glamorise knife crime' it is definitely not a good thing and I don't want to see stuff like this on Facebook. Look before you leap guys."
However, another said: "I love the word 'shank'. I use it all the time. I don't shank people but I used to on Facebook and it's the best option."
Another user wrote: "Gosh, this is Facebook and no one is going to die through a pixel shank. Which is all it is. A few pixels and some 0s and 1s. Lol ever played the game 'Postal'? Guess not haha"
The Superpoke! application is not created by Facebook, but by an American software company called Slide.com, and hosted on the social networking site.
It is one of many software applications created by third-party companies that users can download for free and add to their profiles.
Superpoke! is a big hit with teenagers and one of the most popular applications on Facebook.
A Facebook spokeswoman said: "The story refers to an application called Superpoke made by Slide. Slide have actually removed the 'shank' option from Superpoke."