Fr Frank Pavone (above) posted a Facebook Live video of the foetus, which has been seen more than 230,000 times.
In the video, posted before yesterday's presidential election, he encouraged people to vote for Republican Donald Trump because of his pro-life policies.
The priest, who ministers in Amarillo in Texas, is part of the Priests for Life anti-abortion group. The organisation is not a part of the Catholic Church.
Bishop of Amarillo Patrick Zurek said in a statement: "Father Frank Pavone has posted a video on his Facebook page of the body of an aborted fetus, which is against the dignity of human life and is a desecration of the altar.
"We believe that no one who is pro-life can exploit a human body for any reason, especially the body of a fetus.
"The Diocese of Amarillo deeply regrets the offense and outrage caused by the video for the faithful and the community at large. The action and presentation of Father Pavone in this video is not consistent with the beliefs of the Catholic Church.
"The Diocese of Amarillo is opening an investigation about all these matters."
