Sexual Minorities Uganda (SMUG) has for years championed the rights of LGBT people in Uganda, where homosexuality remains illegal and gay people face arrest, ostracism and violence.
SMUG's operations have now been suspended because "they were operating illegally," Stephen Okello, who heads a government agency that regulates NGOs, said in a statement shared with Reuters on Saturday.
"SMUG continues to operate without...a valid NGO permit," he said, adding that the group's operations had been suspended with immediate effect.
Uganda is a deeply conservative and religious society where LGBT people face general hostility. The country's parliament once passed an anti-gay law that handed out life sentences for some categories of homosexual offences.
That law was ultimately struck down by a court which said it had been adopted without a parliamentary quorum, but some lawmakers and members of the public have sought to reintroduce it.
President Yoweri Museveni, in power since 1986, has previously described homosexuality in Uganda as emblematic of the West’s "social imperialism" in Africa.