He warned the Security Council that armed groups were inciting Christians and Muslims against each other.
Mr Ban also backed the establishment of a UN peacekeeping force before the crisis leads to widespread atrocities.
The impoverished country has been in a state of chaos since rebels seized power in March.
A rebel alliance known as Seleka ousted President Francois Bozize from office, replacing him with the alliance's commander, Michel Djotodia.
Mr Djotodia has since formally disbanded the rebels and integrated many fighters into the national army.
But former rebels linked to Seleka have continued to launch attacks on scores of villages, prompting the emergence of local civilian protection groups.
In a report to the Security Council, Mr Ban said violence in the CAR "threatens to degenerate into a countrywide religious and ethnic divide, with the potential to spiral into an uncontrollable situation".
Armed gangs, mainly former Seleka rebels, who are mostly Muslim, now control most of the landlocked country.
Mr Ban said escalating rebel attacks and retaliation by Christian militia groups "have created a deep suspicion between Christians and Muslims in some areas of the country".
In December, the African Union is due to take charge of the regional peacekeeping force of 2,500 troops currently in the country.
But Mr Ban said he supported the eventual establishment of a UN peacekeeping mission with as many as 9,000 troops as long as conditions allowed.
He also urged Security Council members to impose sanctions against perpetrators of mass rapes and killings allegedly already committed in the CAR.
The Christian majority and Muslim minority always lived in harmony until March 2013 when Mr Djotodia seized power after his forces overran the capital, Bangui.
Mr Djotodia became the first Muslim to rule CAR, installing himself as interim president and forming a transitional government that he says will organise democratic elections.
The government denies targeting any group, but recognises the rise in inter-community violence.
Communal violence in the Central African Republic risks spiralling out of control, the UN Secretary General Ban Ki-moon has said.