Malaysiakini.Com said Najib's lawyers served it with court papers today, claiming he and his ruling United Malays National Organisation (UMNO) were defamed by reader comments published by the portal last month.
The comments questioned Najib's leadership, and alleged corruption in UMNO's 57-year-old government. Such criticisms are routine in the site's reader comment section.
Najib, who had first threatened legal action in mid-May, is seeking damages, an injunction against further defamatory content and an apology from the website.
The ruling coalition - dominated by Najib's Muslim and ethnic Malay party - has wielded press control as a major weapon to help remain in power since independence in 1957.
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The coalition had a virtual monopoly of the media until Internet penetration surged in recent years.
Malaysiakini, launched in 1999, and newer portals have garnered a following with content alleging racial injustice and official corruption - issues largely ignored by the government-controlled media.
Such sites have remained relatively free - despite occasional raids and bans - due to an official pledge not to censor the Internet made in the mid-90s to attract foreign investment.
"It is not an attempt to silence critical voices," he said, according to media reports, adding that there "is a difference between legitimate criticism and defamation".
Last week Human Rights Watch criticised Najib's threats of legal action, calling them "heavy-handed efforts to compel a critical website to toe the line" which showed "a fundamental disregard for press freedom."
An initial court date is set for June 18.