The King of Bahrain and Swaziland's King Mswati III are among controversial monarchs expected at a Windsor Castle lunch being hosted by the Queen.
Critics accuse Bahrain of human rights abuses and say Swazi king Mswati lives in luxury while his people go hungry.
Campaigner Peter Tatchell criticised the Queen for inviting "royal tyrants to celebrate her Diamond Jubilee".
The Foreign Office said it was having "a full and frank discussion on a range of issues" with Bahrain's government.
Buckingham Palace said it would not comment on the lunch.
It will be followed by an evening banquet, hosted by the Prince of Wales and the Duchess of Cornwall. Not all the monarchs will be at both events.
Mr Tatchell said the invitations were "a shocking misjudgement" that showed the Queen was "out of touch with the humanitarian values of most British people".
"Inviting blood-stained despots brings shame to our monarchy and tarnishes the Diamond Jubilee celebrations," he said.
"It is a kick in the teeth to pro-democracy campaigners and political prisoners in these totalitarian royal regimes."
Bahrain officials said King Hamad al-Khalifa - whose country is in a state of civil unrest following crackdowns on protests last year - was expected to attend.
Last month, Bahrain Grand Prix organisers were urged to cancel the race amid public unrest in the country and accusations of human rights abuses.
And in April 2011, Bahrain's Crown Prince Salman bin Hamad al-Khalifa pulled out of the Duke and Duchess of Cambridge's wedding amid controversy over human rights.
A Foreign Office spokesman said Britain was a "long-standing friend and ally of Bahrain".
He added: "On human rights we support the reforms already under way in Bahrain and we want to help promote that reform.
"We have consistently encouraged the Bahraini government to take further urgent steps to implement in full the recommendations of the Independent Commission of Inquiry as His Majesty the King has committed to doing.
"This includes bringing to account those individuals responsible for human rights abuses."
On Thursday, former Foreign Office Minister Denis MacShane criticised Bahrain for doing "such terrible things to its own people since the Arab awakening a year ago".
He said Arab nations "must let their citizens vote in free elections and let them speak without fear of arrest, torture or death".
"The Foreign Office should protect the British Queen rather than expose her to having to dine with a despot."
Anti-monarchist campaign group Republic believes the Queen and her aides have made a "catastrophic error of judgement" in inviting the Bahrani King.
Group chief executive Graham Smith said the Queen "has sent a very strong signal that the British royal family's number one priority is other royals, even if they... oppress their own people".
He added: "The Queen owes a personal apology to all those fighting for freedom in those countries - and to the families of those who have died doing so."
On Wednesday, meanwhile, a group of UK-based Swazis protested outside the Savoy hotel, in London, where King Mswati - who is widely accused of profligate spending - is thought to be staying, with a delegation of 30 officials.
"The money he is using to feed these people could go a long way back home," Flora Dlamini from the Swaziland Vigil group told the BBC's Network Africa programme.
King Mswati is rated by Forbes magazine as the world's 15th richest monarch with a personal fortune of $100m (£62m) - while many of his 1.2 million subjects live in poverty.
Democracy campaigners also want Africa's last absolute monarch to allow political parties and elections.
"If he is allowed to come, the British government is supporting his dictatorship," Ms Dlamini said.
Saudi and Kuwaiti royals are also attending the banquet.
Amnesty international has recently highlighted repression in Saudi Arabia, as the authorities there crack down on protesters and reformists.
And Human Rights Watch has criticised Kuwait for the suspension of a daily newspaper and the conviction of its editor for incitement.
Meanwhile, Queen Sofia of Spain will not be attending because of a dispute over fishing rights off Gibraltar, a UK territory that Spain also claims.
The Spanish government statement said it was "hardly appropriate" for the 73-year-old to attend the lunch.
Her husband, King Juan Carlos, had already declined an invitation because he is recovering from a broken hip.
Other members of the British Royal Family, including the Duke and Duchess of Cambridge, Prince Harry, the Earl and Countess of Wessex and the Duke of York and Princesses Beatrice and Eugenie will also be at the lunch.