Radio Club 100, which broadcasts exclusively for the private white hamlet of Orania, on the edge of the arid Karoo region, was shut down after ICASA found it was not licensed to operate.
The regulator said the decision to confiscate the station's equipment and press legal action had nothing to do with its content, but that Radio Club 100 had been broadcasting racist and right-wing views that could be offensive.
"Our monitors were of the view that it was a racist-based station and very right wing," said Lydia de Souza, ICASA senior manager of broadcast licensing, monitoring and compliance.
"Since the station was run by pirates, they probably only covered Orania and catered for the people who live there."
Fearful that majority black rule would threaten their way of life, a handful of white descendents of Dutch and French settlers bought an entire town in the early 1990s to try to build their dream of a white-only Afrikaner homeland.
The government has refused to grant it the autonomy it seeks and many see Orania as a last vestige of apartheid ideology more than a decade after the end of white rule.
Orania's management confirmed ICASA had raided Radio Club 100 late on Monday but said the station had repeatedly applied for a licence and was merely holding tests, not officially broadcasting. It denied charges of racism on the airwaves and said the station broadcast harmless news about birthdays and social events, not hard-nosed political commentary.