Meeting in Strasbourg the MEPs denounced, in a resolution, the hundreds of arrests by the Turkish government, which they said were being carried out "in an attempt to censor criticism over its military assault" in the Syrian town of Afrin.
The assembled deputies criticised the "deterioration of freedoms and fundamental rights and the rule of law in Turkey".
According to the parliament, the state of emergency in place since a failed coup in 2016 is "being used to further stifle legitimate and peaceful opposition".
Since then, more than 160 media outlets have closed and Turkey's civil society faces a massive crackdown, the MEPs agreed, by a show of hands.
EU funds destined for Turkey should be conditional on Ankara improving its record on human rights, democracy and the rule of law, they added.
The parliament also condemned the recent arrests of journalists, activists, doctors and ordinary citizens for expressing their opinions.
Turkey on January 20 began a major operation aimed at ousting fighters from the Peoples' Protection Units (YPG) from their enclave in the northwestern Syrian town of Afrin.
At least 68 civilians have been killed in the offensive according to the Syrian Observatory for Human Rights.
Turkey has strongly rejected any civilian casualties, saying that its military is showing utmost care not to harm any civilians in the Afrin region.
The Turkish foreign ministry described the EU parliamentary resolution as "nothing but a patchwork of ungrounded claims compiled...just for the sake of criticism".
The emergency measures are still needed "to fully eliminate the threats against the existence of our state and our nation's right to democratic life," the ministry insisted.
On Tuesday EU foreign affairs chief Federica Mogherini also denounced the continuation of Turkey's emergency measures and Ankara's military action in Syria.
Turkish President Recep Tayyip Erdogan is set to meet top European Union officials next month in the Bulgarian city of Varna, officials said Tuesday, in a bid to repair strained ties.
Relations between the EU and Turkey have taken a nosedive since the July 2016 failed coup as well as Brussels' continued objections to Ankara's crackdown. Over 140,000 people have been suspended or sacked over alleged links to coup-plotters.
Turkey's EU membership talks that officially began in 2005 have stalled since the coup bid, to the chagrin of Erdogan who previously said the wait was "exhausting".
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