The painting by Mabulu, which portrays President Jacob Zuma in a sexual act with the late former President Nelson Mandela emerged on Thursday and caused a stir on social media.
Mabulu titled his painting "Economy of Rape". "Whilst we respect Mabulu's freedom of expression, we find his work grotesque, inflammatory and of bad taste," the ANC said in a statement.
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Artist Ayanda Mabulu courted trouble last year when he painted Jacob Zuma performing a sexual act with controversial businessman Atul Gupta in a cockpit of an aeroplane.
"No matter what message he may want to send to President Zuma and the African National Congress, we view his work as crossing the bounds of rationality to degradation, exploiting the craft of creative art for nefarious ends. More concerning is his callous abuse of our icon, the late founding president of democratic South Africa."
Mabulu is no stranger to controversy. He courted trouble last year when he painted Zuma performing a sexual act with controversial businessman Atul Gupta in a cockpit of an aeroplane.
Another of his paintings, titled "Spear Down My Throat (The Pornography of Power)" in 2015 depicted Zuma with his manhood in the throat of a woman (representing South Africa) while she was being penetrated by a hyena in a Victorian suit.
Mabulu's paintings have sparked outrage in certain quarters and heated debate around freedom of expression and respect for the rights of individuals in recent years.
The ANC said "such vulgarity and disdain for the dignity of others" is crude, demeaning, derogatory and markedly made the point that no freedoms, including the freedom of expression, are unlimited.
The ruling party said it would not allow such crassness to be used to insult our sensibilities as a nation and urged all South Africans to remain calm and ignore this graffiti as an instrument of division rather than nation building.
"Accordingly, the ANC reserves its right to seek recourse through the criminal justice system, as well as the institutions set up to promote and protect the fundamental human rights of all in South Africa," the ANC said.
"The ANC will leave it to psychoanalysts and scholars of art to debate Mabulu's narcissistic obsession with the phallus and human genitalia in general."
Meanwhile, the Nelson Mandela Foundation also said in a statement that it found Mabulu's painting "distasteful".
"The Foundation would like to express that it respects Mr Mabulu's right to freedom of expression. We, however, find this painting distasteful."