North Korean group.In an 8-1 decision, judges endorsed the government's petition to disband the Unified Progressive Party (UPP) and ordered the forfeiture of all of its five seats in parliament.
The court ruled the party's platform ran counter to the basic democratic order of the constitution by supporting North Korea's ideological doctrine.
"I hope today's decision will terminate the time-consuming ideological debate in our country," Park Han-Chul, the court's chief judge, said before reading a verdict.
The court was tightly guarded by about 1,000 riot police as hundreds of people from rival groups gathered in the nearby streets, according to images broadcast on television.
About 200 conservative activists, including some veterans clad in military uniforms, hailed the court's decision, waving national flags.
Across the street, some 400 UPP members demonstrated against President Park Geun-Hye, accusing her government of trampling over democratic principles.
"Today the constitutional court opened a dark age with an authoritarian decision," said UPP leader Lee Jung-Hee, who ran in the presidential race in late 2012 and made a big splash in a televised debate with a personal attack on Park.
The leftist party has been at the centre of political debate since UPP politician Lee Seok-Ki was incarcerated
Youse'll never take me alive coppers!... [BANG!]... Ow!... I quit!
last year on charges of plotting an armed revolt in support of North Korea.
The politician, who is on trial, was accused of seeking to "revolutionise" the South in pursuit of North Korean aims.
The main opposition Democratic Party approved of his arrest but opposed the cabinet petition.