The Office of Rail and Road (ORR) said it had safety concerns over the West Coast Railway Company (WCRC).
It follows an incident last March in which a locomotive stopped across a busy main line railway junction near Royal Wootton Bassett.
WCRC managing director Patricia Marshall said she was "disappointed" with the ban.
She added: "West Coast Railways will continue to work closely with the ORR to demonstrate that it can continue operations on the National Network in a safe and proper manner."
WCRC and a driver are facing criminal proceedings after allegedly breaching health and safety laws.
Last March safety equipment was allegedly bypassed on the Tangmere locomotive, which caused it to pass a signal at danger.
A high-speed train had passed over the junction less than a minute before.
The ORR said a number of incidents leading to safety concerns had occurred since the incident, despite the company being warned to improve safety.
It has issued a prohibition notice, which prevents WCRC - based in Carnforth, Lancashire - from operating trains.
Ian Prosser, HM Chief Inspector of Railways at ORR, said the decision to revoke the company's safety certificate had "not been taken lightly".
"However, my concerns about West Coast Railway Company's lack of appreciation of the seriousness of a collective range of incidents over the last year, coupled with ORR's concerns on the company's governance, regrettably make this prohibition necessary.
"These failings create a significant risk to operations on the mainline network.
"We want to encourage successful business operations on our railways and hope WCRC will be able to put in place steps to ensure fit and proper safety management with a view to resuming operations.
"Our inspectors stand ready to work with the company to support and advise as it strengthens its approach to safety."

The 32-year-old ex-Celtic and Brighton winger joined the Hatters on a two-year deal last summer and played 26 times.
"Paddy has had to face up to some personal problems in recent weeks," said boss Nathan Jones.
"At the end of the season he came to me and it was soon clear that he wanted to return to Northern Ireland to be closer to his family and to play there again."
Jones added: "It wasn't a straightforward decision for me - Paddy has done well for us, but in the end we reached an agreement and he goes with my blessing."

Moorways was closed to the public in 2016 but continued to be used by swimming clubs until the end of January.
The decision was made in a bid to save about £350,000 a year.
Council leader Ranjit Banwait said that whatever the cost of a new pool, it was important to get it right.
Moorways, built more than 40 years ago, has struggled with maintenance and health and safety issues.
Derby's other big pool, at the Queen's Leisure Centre, is currently closed due to structural problems, although two other pools remain open for public use at the centre.
The Moorways closure was opposed by high-profile swimmers Ross Davenport, who won two gold medals at the Commonwealth Games in 2006, and Olympic champion Adam Peaty, who now trains outside the city.
Mr Banwait said: "To start work on the pool we've set £20m aside as an initial amount of money.
"Potentially the work is going to cost more than that, we are currently looking at the designs... if it means it is going to cost more we will put that money in place.
"The most important thing is that we get this right, this pool's going to be built and it's going to be there for generations to come."
The new 50m pool is expected to be built by 2020.
A steam train operator has been banned from running its rail services on the UK's mainline railway.
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Paddy McCourt has left League Two side Luton Town by mutual consent to return to his native Northern Ireland.
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A replacement for one of Derby's council-run swimming pools could cost more than the £20m the local authority estimated.