In a statement issued here, Jayalalithaa said Sasikala Pushpa acted against the party's principles and code of conduct and also in a manner that defamed the party.
The dismissal comes after Pushpa slapped DMK's Rajya Sabha member Tiruchi Siva at Delhi airport two days back.
Jayalalithaa said Pushpa is dismissed from Monday from all party posts and also from the basic membership of the party.
Party members were asked not to have any contact with her.
Pushpa is different from Jayalalithaa's close aide Sasikala Natarajan.
Pushpa told reporters that she slapped Siva several times as he was making some nasty remarks about Jayalalithaa.
However, Siva later told reporters that he was hit only once.
It was reported that Pushpa was asked by Jayalalithaa to explain her behaviour and the reasons for assaulting Siva.
Pushpa on Monday alleged in the Rajya Sabha that she was facing a "life threat" and that she was being "compelled to resign".
"I fear threat to my life. I am being compelled to resign from my constitutional post by my leader, for whom I have much gratitude."
According to reports, Sasikala visited AIADMK chief J. Jayalalithaa's residence on Sunday.
"In Tamil Nadu I have no safety... I need protection," Sasikala said but other AIADMK members protested against her remarks.
Rajya Sabha Deputy Chairman P.J. Kurien asked her to write to the Chairman about the issue. He also assured other AIADMK members that reference to any person who cannot defend themselves in the house will be deleted.
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