It is "regrettable that some sections of the media have taken upon themselves to use" Shahzad's death for "targeting and maligning the ISI", an official of the spy agency was quoted as saying by state-run APP news agency.
"Baseless accusations against the country's sensitive agencies for their alleged involvement in Shahzad's murder are totally unfounded," said the official, who spoke to APP on condition of anonymity.
Pakistani journalists' organisations and rights groups like Human Rights Watch have alleged that Shahzad was abducted by the ISI two days after he reported that al-Qaeda had infiltrated the Pakistan Navy.
Shahzad went missing in Islamabad on Sunday evening and his body, bearing marks of severe torture, was subsequently found in Punjab province.
Prime Minister Yousuf Raza Gilani has ordered a probe into the murder. The ISI official described Shahzad's death as "unfortunate and tragic" and said it was "a source of concern for the entire nation".
The incident should not be used to "target and malign" security agencies, the official said.