The overnight operation in Dura near Hebron led to five arrests, according to the Israeli army.
Palestinian police confirmed the detentions and said one of those held was the director of the Al-Sanabel station.
Broadcast equipment was also seized, the army said.
According to Palestinian police, the station's door was broken during the raid and a notice was given saying it was ordered closed for three months.
An Israeli army spokeswoman could not provide examples of the type of content that led to the raid.
"The radio station has repeatedly broadcast inciting content encouraging, celebrating and promoting violence and terrorism against Israelis," she said.
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Israeli authorities have closed at least four Palestinian radio or TV stations since a wave of violence erupted in October.
The violence has killed 222 Palestinians, 34 Israelis, two Americans, an Eritrean and a Sudanese, according to an AFP tally.
Violence has steadily declined in recent months.
Most of the Palestinians killed were carrying out knife, gun or car-ramming attacks, according to Israeli authorities.
Others were shot dead by Israeli forces during protests and clashes, while some were killed in Israeli air strikes in the Gaza Strip.
Much of the violence has occurred in the Hebron area in the southern West Bank, a flashpoint in the Israeli-Palestinian conflict.
Analysts say Palestinian frustration with Israeli occupation and settlement-building in the West Bank, the complete lack of progress in peace efforts and their own fractured leadership have fed the unrest.
Israel says incitement by Palestinian leaders and media is a leading cause of the violence.