The flight from Gatwick to Newquay was an estimated 300ft (90m) off the ground when the wild animal was spotted.
Passenger Pete Atkinson said there was a tense five-minute gap between the aircraft climbing sharply away from the runway and the pilot announcing the badger's presence.
The airport said it was a case of being "cautious in the interest of safety".
Mr Atkinson, a freelance cameraman, said: "We were on the final approach when all of a sudden the under-carriage was lifted back up and the engines revved up.
"People went quiet and started to look out of the window as we headed out over the sea."
About five minutes later, the pilot announced the diversion of the aircraft carrying about 60 people was due to a badger being seen on the runway.
Mr Atkinson said passengers then laughed and made jokes about roadkill.
FlyBe flight 806 was due to land at 21:15 GMT on Sunday was delayed by around 15 minutes.
A spokesman for Cornwall Airport Newquay said there was "a suspected badger sighted on the runway by the bird control unit".
The spokesman said the aircraft landed safely following a full check of the runway.
A badger on an airport runway forced a passenger plane to abort its landing.