Fahmi Reza’s depictions of Najib went viral earlier this year, and posters and stickers bearing the images have also appeared in public places, earning the designer-activist comparisons to street-art provocateurs like Banksy.
He was charged under a section of Malaysian communications and multimedia laws that forbid disseminating online content deemed to “annoy, abuse, threaten, or harass” others.
Fahmi, 38, faces a possible one-year prison sentence and 50,000 ringgit ($12,200) fine, said his attorney, Syahredzan Johan.
“This is essentially criminalising (free) expression,” said Syahredzan.
Fahmi pleaded not guilty after the charge was read out in court.
Syahredzan said police were also investigating him for sedition.
In a Facebook posting Monday, Fahmi vowed to “defend my rights to criticise the corrupt rulers by using art as a weapon”.
Fahmi was warned by police previously to stop posting the images, which show Najib in powder-white clown make-up, evilly arched eyebrows and a garish blood-red mouth.
Najib is battling accusations that billions of dollars were stolen from a state-owned development fund he oversees, and is under pressure for accepting a mysterious $681 million overseas payment.
Najib denies accusations that the huge payment was siphoned from the struggling fund.
But he has fuelled anger by curbing investigations, purging government figures who have demanded transparency and clamping down on media reporting of the affair.
Even before the corruption allegations emerged a year ago, Najib’s government had moved to silence critics following a 2013 election setback.
Dozens of government opponents including opposition politicians have been investigated for, or charged with, a range of offences over the past three years, typically sedition.
The campaign has drawn growing warnings from international human rights groups that free expression and democratic rights in Malaysia are under severe threat.