Khan had described Altaf Hussain, head of the Muttahida Qaumi Movement (MQM), as a "terrorist" for his part in violence in Karachi on May 12 that left 42 dead.
Khan, leader of the Tehrik-e-Insaaf party, told AFP: "I have been barred from entering Karachi for one month. This itself is blatant terrorism.
"They want to use fear as a tool and anyone doing that is committing terrorism."
Khan has clashed with the MQM, which is part of Karachi's ruling coalition, over his plan to take Hussain, who lives in London, to court in connection with the violence in the port city.
"My only fault is that I have protested against the terrorism unleashed by the MQM on May 12," he said.
"Altaf Hussain treats Karachi as his private fiefdom. He is acting like a mafia don, and since I announced my intention to take him to court he has gone berserk.
"This ban makes me more determined to pursue this through legal channels."
The riots in Karachi were the country's worst ethnic clashes for two decades -- the bloody climax to two months of protests against President Pervez Musharraf's suspension of top judge Iftikhar Muhammad Chaudhry.
The violence started between pro- and anti-government camps but developed into ethnic fighting.
Musharraf suspended Chaudhry, the head of the country's Supreme Court, on March 9 on charges of misconduct, including that he used his position to get official jobs for his son.