The social networking platform admitted it built such an app which was never released publicly, and argued against its use to identify people.
Business Insider first reported on this, saying the app was developed between 2015 and 2016 but has since been discontinued.
"As a way to learn about new technologies, our teams regularly build apps to use internally. The app described here were only available to Facebook employees, and could only recognize employees and their friends who had face recognition enabled," a company spokesperson told CNET on Friday.
The app highlights how Facebook experimented with features that could heighten the anxiety of people worried about their privacy.
Facebook has received criticism for using facial recognition in the past.
There were reports in October this year that Facebook's Artificial Intelligence (AI) research team has developed a tool that tracks the facial recognition system to wrongly identify a person in a video.
The "de-identification" system, which also works in live videos, uses machine learning to change key facial features of a subject in a video.
"Face recognition can lead to loss of privacy and face replacement technology may be misused to create misleading videos," reads a paper explaining the company's approach.
"Recent world events concerning advances in, and abuse of face recognition technology invoke the need to understand methods that deal with de-identification. Our contribution is the only one suitable for video, including live video, and presents a quality that far surpasses the literature methods," said the paper.
Facebook is facing a $35 billion class-action lawsuit for alleged misuse of facial recognition data in Illinois. A US court has denied Facebook's request to quash the lawsuit.
( With inputs from IANS )