Opening his case against the party in the constitutional court, Prosecutor Vural Savas said Virtue was trying to replace the constitution with Islamic law.
The move follows the resignation of the Virtue Party's chairman, Aydin Menderes, in a growing row over the wearing of a banned Muslim headscarf in parliament by a party deputy.
Mr Savas was behind last year's closure of a previous Islamist party, Welfare, which briefly led the Turkish Government.
Most of the Welfare party's deputies regrouped in the Virtue Party behind a new leadership and investigations have been under way for some time to establish whether Virtue is a direct continuation of the banned party.
The party won more than 100 seats in last month's general election.
The role of religion
On Sunday, Merve Kavakci, a newly-elected woman Virtue Party deputy, re-ignited debate over the place Islam holds in Turkey when she wore the Muslim headscarf in parliament.
Turkey, which is officially secular, regards the wearing of the Muslim headscarf as a political, pro-Islamic statement and has banned them in public institutions.
Ms Kavakci and party leader, Recai Kutan, have refused to back down.
Dividing the country
Announcing his resignation as Virtue chairman on Thursday, Mr Menderes said he felt that Virtue - the third biggest party in parliament - was bent on self-destruction over the issue.
He said both sides of the political and religious fence were using the issue to divide the country.
"If I thought Virtue could take a fresh and wiser path I would have continued my job," he said. The son of a former prime minister, Mr Menderes, was seen as a moderate voice in the Virtue Party.
Party faces investigation
Prosecutors are examining whether Ms Kavakci's actions amount to incitement to racial or religious hatred.
Angry MPs forced the newly-elected deputy to leave the parliament building before she could take her oath of office.
Since then the issue has dominated Turkey, with newspapers probing her past.
Reports in the country's mainstream media have attacked her for allegedly calling for an Islamic holy war in Turkey and opposing Turkish plans to join the European Union because it is composed of mainly Christian nations.
Country profiles
Analysis: A headscarf too far?
(07 May 99 | Europe)
Headscarf deputy stands ground
(03 May 99 | Europe)
Headscarf row in Turkey parliament
(03 May 99 | Europe)
Analysis: Turkey's winners and losers
(19 Apr 99 | Europe)
Republic of Turkey
Turkish Daily News
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