The star, who stands 2ft 8 ins tall, has filed a $20 million (£10 million) lawsuit claiming invasion of privacy and breach of copyright. He says the tape was stolen and has since ended up in the hands of the same film producer who distributed a notorious sex tape of hotel heiress Paris Hilton.
Mr Troyer, 39, is the latest in a long line of Hollywood celebrities to have their sex lives aired on the internet.
He made the tape with a former girlfriend, an American model in her 20s.
Mr Troyer filed his lawsuit at a court in Los Angeles and also requested and injunction banning further distribution of the film.
The actor, who is Hollywood's smallest star and also a stunt man, was married briefly in 2004 to a yoga teacher.
The following year he appeared on a US reality television show where he got drunk and urinated in the corner of a gym while riding naked on a scooter.
His most famous film role has been as Mini-Me, a miniature clone of Dr Evil, played by Mike Myers, in the Austin Powers films.
He appears in the second and third films of the trilogy - Austin Powers: The Spy Who Shagged Me and Austin Powers in Goldmember.
The actor also starred as Griphook the Goblin in the film of Harry Potter and the Philosopher's Stone.
