Luis Moreno-Ocampo said Col Gaddafi, his son Saif al-Islam, and intelligence chief Abdullah al-Sanussi bore the greatest responsibility for "widespread and systematic attacks" on civilians.
ICC judges must still decide whether or not to issue warrants for their arrest.
The Libyan government has already said it will ignore the announcement.
Deputy Foreign Minister Khalid Kaim said the court was a "baby of the European Union designed for African politicians and leaders" and its practices were "questionable".
Libya did not recognise its jurisdiction, like a few other African countries and the United States, he added.
'Inner circle' Continue reading the main story
Andrew North BBC News, Tripoli Luis Moreno-Ocampo's call for the arrest of Col Gaddafi on war crimes charges is his second for a sitting head of state. But as with his indictment of Sudan's President Omar al-Bashir, this could be just as hard to enforce.
Some fear this will only complicate efforts to bring the violence to an end, making it harder to negotiate a settlement - if potential interlocutors fear they will face future prosecution.
The Libyan authorities have already dismissed the International Criminal court as irrelevant. But the prosecutor's office says it has been getting calls from some unnamed Libyan officials offering evidence, which if true suggests some at least take the prosecutor's investigations very seriously.
And the Libyan leader, his son and his intelligence chief are now looking even more isolated.
Mr Moreno-Ocampo said that after reviewing more than 1,200 documents and 50 interviews with key insiders and witnesses, his office had evidence showing that Col Gaddafi had "personally ordered attacks on unarmed Libyan civilians"."His forces attacked Libyan civilians in their homes and in public spaces, shot demonstrators with live ammunition, used heavy weaponry against participants in funeral processions, and placed snipers to kill those leaving mosques after prayers," he told a news conference in The Hague.
"The evidence shows that such persecution is still ongoing as I speak today in the areas under Gaddafi control. Gaddafi forces have prepared a list with names of alleged dissidents, and they are being arrested, put into prisons in Tripoli, tortured and made to disappear," he added.
Mr Moreno-Ocampo continued: "His [Col Gaddafi's] second-oldest son, Saif al-Islam, is the de facto prime minister and Sanussi, Gaddafi's brother-in-law, is his right-hand man - the executioner, the head of military intelligence. He commanded personally some of the attacks."
Continue reading the main storyThe office documented how the three held meetings to plan and direct the operations”End Quote Luis Moreno-Ocampo Prosecutor, International Criminal Court The prosecutor insisted he was "almost ready" for a trial, based on the testimony, particularly of those who had escaped from Libya.
Libya's opposition National Transitional Council praised the ICC move.
But its vice-president, Abdel Hafez Ghoga, said: "We would like him [Col Gaddafi] to be tried in Libya first before being put on trial in an international court."
Selective justice?Earlier, Mr Moreno-Ocampo said the three men were suspected of committing crimes against humanity in two categories - murder and persecution - under the Rome Statute, which established the court.
The charges cover the days following the start of anti-government protests on 15 February. Between 500 and 700 people are believed to have been killed in that month alone.
ICC prosecutors are also studying evidence about the alleged commission of war crimes once the situation developed into an armed conflict.
This includes allegations of rape and attacks against sub-Saharan Africans wrongly perceived to be mercenaries.
An inquiry set up by the UN Human Rights Council is expected to submit its report on the alleged war crimes to the UN Security Council on 7 June.
The charges cover the days following the start of anti-government protests on 15 February Mr Moreno-Ocampo said he was acting in accordance with UN Security Council resolution 1970, which referred the situation in Libya to the ICC.
The Pre-Trial Chamber's judges may decide to accept the prosecutor's application, reject it, or ask him for more information.
If a warrant for Col Gaddafi is issued, it would only be the second time the ICC has sought a warrant for a sitting head of state.
Sudanese President Omar al-Bashir has been indicted for genocide in Darfur.
Amnesty International said the international community must not allow justice to appear selective, because what was happening in Syria was "equal to if not worse than the situation in Libya".
Overnight, Libyan state television reported Nato aircraft had bombed an oil terminal in the eastern port of Ras Lanuf.
The alleged raid came after insurgents said they had taken full control of the western city of Misrata.
The rebels also said they had defeated two brigades of troops loyal to Col Gaddafi in the city of Zintan, south-east of Tripoli, over the weekend.
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