The Times reported that Mr O'Carroll joined the party in Barrow-in-Furness after Jeremy Corbyn became leader.
The constituency MP, John Woodcock, and deputy leader Tom Watson were among those to say he was not welcome.
A Labour spokesman said: "Tom O'Carroll has been suspended from the Labour Party."
Mr Woodcock had tweeted on Tuesday that he was "dismayed" Mr O'Carroll had joined the party, and said he had written to Labour's general secretary, Iian McNicol to ask for him to be banned for life.
Meanwhile, Mr Watson, Labour's deputy leader, said in a tweet: "Just picking up on the Tom O'Carroll story. Have to verify the facts but he is not welcome in the Labour Party and nor are his views."
Formed in 1974, the Paedophile Information Exchange (PIE) campaigned for "children's sexuality". It wanted the government to scrap or lower the age of consent.
In 1981, Mr O'Carroll, then PIE's chairman, was sentenced to two years in jail for "conspiracy to corrupt public morals". PIE was disbanded in 1984.
O'Carroll was sentenced to two and a half years in prison in 2006 for distributing child pornography images.
Tom O'Carroll, ex-head of Paedophile Information Exchange which campaigned to lower the age of sexual consent to 10, has been suspended by Labour.