Cristiano Ronaldo scored a hat-trick, as the La Liga side overpowered 10-man Bayern at the Santiago Bernabeu.
The Portugal captain appeared to be offside for the second of his three goals, while Arturo Vidal was sent off rather harshly.
In his post-match press conference, Ancelotti, who was sacked from Madrid two years ago, said: “(The) referee’s performance was worse than ours.
“I know it’s football and it happens sometimes, but not this serious of a mistake.
“A quarter-final, you have to have a referee with… I don’t know… more quality. Or have video. There are too many errors.
“I don’t say this [we’d have gone through with another ref]. I don’t like to do it either.
“The ref had a bad game. Full-stop.
“A lot of times with these decisions, there is doubt. Here there is no doubt. I saw it live.”