The tiny duchy is the eighth nation to be affected after eggs contaminated with the chemical fipronil were found.
The tiny duchy is the eighth nation to be affected after eggs contaminated with the chemical fipronil were found in Belgium, the Netherlands, Germany, Sweden, Switzerland, Britain and France.
Luxembourg said it had informed the European Commission, the executive arm of the 28-nation European Union, which runs the bloc's food safety alert system.
Discount supermarket chain Aldi had withdrawn suspect batches sold in Luxembourg but "contaminated eggs were sold on the Luxembourg market", the government announced.
One batch contained so much fipronil it was unsafe to be eaten by young children, said the government statement. The batch posed no threat to consumers, it added.
Aldi earlier this month pulled all Dutch eggs from its stores in Germany.
Tests meanwhile found "small quantities" of fipronil in eggs sold in Luxembourg supermarket chain Cactus, which had originally come from the Netherlands, the government said.
Two Luxembourg suppliers of prepared meals, Caterman and Carnesa, also reported having received cartons of liquid eggs from a contaminated source in Belgium.
Some of those eggs had been used in minced beef and luncheon meat but the items had been removed, they said.
"There are therefore no more products on the market," a government spokesman said.
Fipronil is commonly used in veterinary products to get rid of fleas, lice and ticks but it is banned by the EU from being used to treat animals destined for human consumption, such as chickens.
In large quantities, the insecticide is considered by the World Health Organization to be "moderately hazardous" and can have dangerous effects on people's kidneys, liver and thyroid glands.