Joe Gordon, who has been running his Woolamaloo Gazette satirical newsletter since 1992, was dismissed last week after working for the bookseller for 11 years, following a disciplinary hearing.
Gordon's blog, which covers everything from the city of Edinburgh to UN scientists in Iraq, also mentions his work in one of the chain's Edinburgh branches. As well as discussing visits from authors to the store and which cartoon characters his work colleagues would be, Gordon occasionally used his online diary to vent steam about his working life.
And terms like "Bastardstone's" and "Evil Boss" have drawn Waterstone's ire.
Although Waterstone's has no employee policy that deals with blogging, according to Gordon, the chain said that Gordon's site had brought it into disrepute.
Gordon, however, maintains that such descriptions should have been taken light-heartedly and were meant to be reminiscent of a Dilbert cartoon. "I didn't set out with intent to harm," he said.
Gordon, who ran a book group for the shop and has appeared on television and radio as a Waterstone's employee, said: "I've done so much promotion for this company; it's not true."
If his manager had asked him to stop talking about his job at Waterstone's in his blog, Gordon said he would have done so. "I could lived with not talking about that...They've been so heavy-handed," he said.
Gordon is talking to his union about his dismissal and may take further action. Waterstone's did not immediately respond to requests for comment.
Gordon is not the first blogger to have found himself out of a job after writing about an employer.
, formerly a flight attendant for Delta Air Lines, was fired after management saw pictures of her posing in her uniform on her Web site. Jessica Cutler, the now infamous "Washingtonienne," was terminated from her job in a Senator's office for the content of her blog.
The blogging phenomenon is growing rapidly. A report by the Pew Internet & American Life Project found readership of blogs increased by 58 percent last year and that 7 percent of adults have their own blogs.
Jo Best of Silicon.com reported from London.