"The African National Congress is extremely disturbed and outraged by the distasteful and indecent manner in which Brett Murray and the Goodman Gallery in Johannesburg is displaying the person of comrade President Jacob Zuma," ANC spokesman Jackson Mthembu said in a statement.
"We have this morning [Thursday] instructed our lawyers to approach our courts to compel [them] to remove the portrait from display as well as from their website and destroy all printed promotional material."
The 1.85m-high acrylic on canvas painting titled "The Spear" is part of Murray's "Hail to the Thief II" exhibition at the gallery.
It is part of a body of satirical work which is a sequel to his 2010 exhibition "Hail to the Thief".
A biography of Murray handed out by the gallery shows how Murray's work continues his forthright attacks on abuses of power.
His bronzes, etchings, paintings, and silk-screens formed part of a "vitriolic and succinct censure of bad governance".
They were Murray's attempts to humorously expose the paucity of morals and greed within the ruling elite, according to the biography.
The painting of Zuma, and a few other pieces, have already been sold.
The ANC said the painting violated Zuma's right to dignity.
It said the image and the dignity of the president as president of the ANC, president of the country, and as a human being had been dented by "this so-called piece of art".
Staff at the Goodman Gallery said on Thursday that the exhibition, which opened on May 10, had been well received, with positive comments in the guest book.
"Hilariously sad and true," wrote one person. Other comments were "brilliant", "very cool", and "amazing".
The gallery said it would make an official comment in response to the ANC's threat of court action, but had not done so by Thursday evening.
The ANC also bemoaned the use of the party's logo.
Part of Murray's work was a poster of the ANC's emblem with "for sale" printed on top of it and then "sold" stamped across it.
"The vulgar portrait and the dismembering of the ANC logo... is an abuse of freedom of artistic expression and an acute violation of our constitution, apart from being defamatory," said Mthembu.
Murray also took struggle posters and adapted them to read: "Amandla, we demand Chivas, BMWs and bribes"; "Now you have touched the women you have struck a rock, you have dislodged a boulder; you will be president"; and "Tell my people that I love them and that they must continue the struggle for Chivas Regal, Mercs and Kick-backs".
The exhibition runs until June 16.
Murray is Cape Town-based artist whose work is to be found in a number of South African and international galleries.