Noted europhile Heseltine, who has long opposed Brexit, had prompted outrage from some Tory members after he endorsed a Liberal Democrat candidate ahead of Thursday’s poll – in contravention of party rules.
A spokesman for the Tories said: “Lord Heseltine has given more than half a century of service to the Conservative Party, and his longstanding and sincerely held views on Europe are well understood.
“But, with his long experience, he will know that publicly endorsing the candidates of another party is not compatible with taking the Conservative whip in parliament.
“As a result, the chief whip in the House of Lords has informed Lord Heseltine that he will have the Conservative whip suspended. This will be reviewed if he is willing to support Conservative candidates at future elections.”
Heseltine earlier told the BBC that he had merely lent his support to an individual Liberal Democrat candidate, Bill Newton Dunn, for the upcoming European elections.
“I’m not going to leave the Conservative Party and I’m not going to resign the Conservative whip – that’s where my natural home is,” he told Radio 5 Live.
“But I’m not prepared to indulge in this act of national sacrifice by voting for Brexit.”
Responding to the party’s decision, Tory MP Sir Nicholas Soames told Channel 4 News it was a “really stupid, bovine thing to do”.
“I will have very strong words with the chief whip,” he added.
Heseltine, 86, served in the governments of Margaret Thatcher and John Major and was an adviser to David Cameron.
He was sacked as an advisor by Theresa May after rebelling over a Brexit vote in the House of Lords.