Nasrallah told a crowd of tens of thousands of Lebanese Shiite Muslim, marking the Ashura religious ceremony, that Egypt should be condemned if it does not halt the wall building.
Tensions between Egypt, a predominantly Sunni country, and Hezbollah, a Shiite group backed by Iran, have been running high since last year when Nasrallah accused Cairo of complicity with Israel in its siege of the Gaza strip.
"In addition to the siege there has been news about (building) a steel wall... to terminate the thin veins which are giving some life and some hope to Gaza," he said.
"We call on the government in Egypt and the leadership to stop the wall and flooding the tunnels and to end the siege otherwise it should be condemned by all Arabs and the Muslims," he said.
Egypt is trying 26 men suspected of links with Hezbollah and accused of planning attacks inside the country. Hezbollah denies they had plans for attacks inside Egypt and says one of the men is a Hezbollah member and that he and up to 10 others were trying to supply military equipment to Hamas-run Gaza.
Egyptian officials said steel tubes were being placed at several points along the eight-mile-long border, but they did not specify their purpose.
Palestinians fear a steel barrier, deep underground, would limit or end smuggling through hundreds of tunnels operating in defiance of Israel's blockade.
Shortly before Nasrallah's speech tens of thousands of Shiite Muslim Lebanese, chanting "Death to America, death to Israel," marched in Hezbollah's Beirut stronghold to commemorate the annual Ashura ritual.