El Pais in January published account ledgers purportedly showing that Mariano Rajoy, now prime minister, and other party leaders received tens of thousands of euros in undeclared payments channelled from donors.
"The Popular Party this morning brought a lawsuit for infringement of its honour against the publisher of the newspaper El Pais," Rajoy's party said in a statement on Wednesday.
"It has also presented another suit against the author of the false documents that were published," it added.
According to El Pais the accounts were drawn up by the party's former treasurer, Luis Barcenas, but he has denied it.
The party reiterated its denial of any undeclared payments and said any suggestion that it had kept secret accounts was "radically false".
The allegations have prompted public prosecutors to open an investigation into the party's financing.
The affair rattled the party and fuelled public outrage as Rajoy pushes through economic reforms to stabilise Spain's crisis-hit public finances.
In its statement the party said the documents were false and had "seriously damaged the image of the Popular Party and its leaders".
It demanded the newspaper pay €500,000 ($650,000) in compensation which it would give to a social cause.
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