In an open letter published
by Fairfax Media in Australia, Navratilova also urged Tennis Australia to take action by renaming the Margaret Court Arena, one of the arenas used for the Australian Open.
Neither Court nor Tennis Australia were immediately available for comment.
Court, who has won more tennis grand slams than any other player in history with 24, has been heavily criticized since claiming that tennis is "full of lesbians" earlier this week.
"It is now clear exactly who Court is: an amazing tennis player, and a racist and a homophobe," wrote Navratilova, referring to the Australian's views on South Africa's past apartheid policy.
"Her vitriol is not just an opinion. She is actively trying to keep LGBT people from getting equal rights (note to Court: we are human beings, too). She is demonizing trans kids and trans adults everywhere.
"And now, linking LGBT to Nazis, communists, the devil? This is not OK. This is in fact sick and it is dangerous.
"Kids will suffer more because of this continuous bashing and stigmatizing of our LGBT community."
'Blood on hands'
Navratilova, who is openly gay, addressed her letter to "Margaret Court Arena" rather than the former player as she urged the tennis authorities to take action.
Court, who referred to homosexuality as "a lust of the flesh," during an interview with Christian Vision Radio earlier this week, also claimed "everybody knows that it is wrong but they're after our young ones, that's what they are after."
Those comments drew a fierce rebuke from Australian tennis players Sam Stosur and Casey Dellacqua as well as men's No. 1 Andy Murray.
But Navratilova has gone further, accusing Court, a 74-year-old pastor at Perth's Victory Life Church, of "bashing" and "bullying."
"How much blood will be on Margaret's hands because kids will continue to get beaten for being different? This is not OK," Navratilova said.
"Too many will die by suicide because of this kind of intolerance, this kind of bashing and yes, this kind of bullying. This is not OK."
What did Court say?
Court's remarks came less than a week after she said she would refuse to fly Australia's national airline Qantas because it supported same-sex marriage.
In the interview with Vision Christian Radio, Court also referenced Adolf Hitler and the devil while criticizing homosexuality.
"I mean, tennis is full of lesbians because even when I was playing there was only a couple there but those couple that lead ... took young ones into parties and