Facebook said in a press release that it had been storing passwords of millions of Instagram users in a readable format, reported Sputnik news agency.
Instagram is owned by Facebook after its purchase in April 2012.
"We discovered additional logs of Instagram passwords being stored in a readable format. We now estimate that this issue impacted millions of Instagram users. We will be notifying these users as we did the others."
"Our investigation has determined that these stored passwords were not internally abused or improperly accessed," the statement issued on Thursday said.
This is not the first case when company employees could have had access to passwords of social network users.
In late March, Facebook said it had been storing passwords of hundreds of millions of users in a plain text format, making them accessible to the company's employees, who had internal access to the system.
Facebook then said the issue had already been fixed, adding that users' passwords are usually protected with encryption.