The Movement for Democratic Change (MDC) faction said it suspended former Prime Minister Tsvangirai, his deputy Thokozani Khupe, chairperson Lovemore Moyo and four other senior party officials.
The group, which includes party secretary general Tendai Biti, said Tsvangirai had violated the MDC's constitution by expelling deputy treasurer general Elton Mangoma, who had called for his resignation.
"This council has suspended Morgan Richard Tsvangirai (as party leader)," Samuel Sipepa Nkomo, acting chairperson of the splinter faction, said after a meeting in the capital Harare.
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"We will not walk with those who have violence in their veins."
Biti told journalists that Tsvangirai has betrayed the struggle to democratise Zimbabwe, which has been ruled for nearly 34 years by veteran leader Robert Mugabe.
"We feel these people have betrayed the struggle," he said. "We will rebuild our party from the current ashes."
But MDC spokesperson Douglas Mwonzora dismissed claims that Tsvangirai has been suspended.
"It is a legal nullity, President Tsvangirai remain the legitimate leader of the MDC," Mwonzora said over the telephone.
"That was not a national council meeting."
The MDC, formed in 1999 by an alliance of trade unions and civic groups, has been seen as the most credible challenger to 90-year-old Mugabe's grip on power.
But it has been riven by tensions since ex-premier Tsvangirai was beaten at the polls last year.
Mwonzora said the MDC's internal strife had been caused by interference from Mugabe's ZANU-PF and state security agents.
"That meeting is a culmination of a sustained covert programme involving state security, Mugabe's ZANU-PF party and a few malcontents to destabilise the MDC," he said.
Mangoma was expelled for 'defying the party directives' after he suggested Tsvangirai should step down as leader of the MDC following last year's election defeat to veteran ruler Robert Mugabe.
His call sparked furious disagreement within the party that degenerated into physical attacks, with suspected Tsvangirai loyalists beating Mangoma in front of the party's headquarters.
The party's treasurer Roy Bennett, who is exiled in South Africa, and other officials have made similar calls for Tsvangirai to resign after losing to Mugabe in the July 31 general elections.
