A spokesman for the conservative government of Prime Minister Mariano Rajoy said it was challenging "certain parts" of the law adopted last year and hailed by animal rights groups.
"The autonomous community doesn't have in its mandate the specific power to protect animal rights," Inigo Mendez de Vigo told reporters in Madrid.
While not prohibiting bullfighting outright, the regional parliament of the Spanish archipelago voted an animal protection law banning the use of "sharp implements that can injure and/or kill the bull" in the ring, effectively outlawing the animal's slaughter.
The law also limits to three the number of animals that bullfighters can spar with, for a maximum duration of ten minutes per bull.
It also forces bullfighters and animals to take anti-doping tests before and after the corrida, and allows only people aged 18 and above to watch.
The islands are not the only region to have banned or restricted bullfighting as an increasing number of Spaniards discard the sport as a cruel spectacle.
But the measures have always come up against stiff resistance from supporters who see the tradition as an integral part of Spanish culture.
In October 2016, Spain's Constitutional Court cancelled a bullfighting ban in the northeastern region of Catalonia.
It argued that bullfighting was classified as part of Spain's heritage, and therefore a decision on banning it was a matter for the central government and not for semi-autonomous regions.
Mendez de Vigo said the government viewed the law as "contravening different precepts of state laws on intangible heritage and bullfighting."
The only other Spanish region to have successfully banned bullfighting is the Canary Islands, though Castile and Leon in Spain's northwest abolished the killing of bulls at town festivals last year.
Several cities have also put a stop to bullfighting or annual festivals with bull running over the years.
But other traditions with bulls continue to take place, such as placing flaming torches on their horns and letting the animals loose in the street.