The spying, if true, is "inappropriate and unacceptable between partners and friends", Rajoy told parliament, reiterating a statement from the foreign ministry on Monday, when it summoned the US ambassador.
Rajoy said the head of Spain's National Intelligence Centre, Félix Sanz Roldàn, would address a parliamentary committee on official secrets on the case.
The prime minister was briefing lawmakers on last week's European Union summit, which was dominated by reports of spying by the US National Security Agency (NSA), including alleged tapping of German Chancellor Angela Merkel's telephone.
The United States' European allies protested after newspaper reports, based on leaks from fugitive analyst Edward Snowden, that Washington collected tens of millions of telephone calls and online communications as part of anti-terror operations.
Spanish newspaper El Mundo on Monday published a document it said was supplied by Snowden, an ex-NSA contractor, that purportedly showed the agency had spied on more than 60 million telephone calls in Spain in a month.
That followed similar reports of spying in France, Germany and other European countries.
US officials hit back on Tuesday, turning the tables by saying European agencies had gathered data and shared it with the United States.
The Wall Street Journal cited US officials saying that the intelligence agencies of France and Spain carried out electronic surveillance outside their own borders and passed data onto the NSA.
US intelligence chiefs testified to lawmakers on Tuesday that European newspapers had misinterpreted information passed on by Snowden.
The US Director of National Intelligence, James Clapper, told a committee meeting of the House of Representatives that surveillance of foreign leaders was "kind of a basic tenet" of US agencies.
On Tuesday, Roldàn, the head of Spain's intelligence agency stated: "We have always worked within the law."
But he added that the law "impeded" the agency "from commenting on relations with other security agencies".
Also on Tuesday, Spain's public prosecutor opened a preliminary investigation into the reports of eavesdropping on telephone calls to determine whether a crime was committed.