Dmitry Peskov, a Kremlin spokesman, said Russia could no longer tolerate a situation where it was complying with the treaty but its partners were not, and he expressed hope Russia's move would induce Western nations to commit to the updated treaty.
Talks last month with Nato states ended without progress.
He said: "Such a situation contradicts Russia's interests. Russia continues to expect that other nations that have signed the CFE will fulfill their obligations."
A Nato spokesman said on Saturday of the Russian suspension: "If this is confirmed the Secretary General very much regrets this decision.
"The allies consider this treaty to be an important cornerstone of European security."
The differences over the pact are part of broader tensions between Russia and the West.
Relations are strained by disagreements over US plans for a missile shield in eastern Europe, proposed independence for Serbia's Kosovo province and Moscow's energy policies.
A source of friction over the CFE treaty is Nato's insistence on preserving "flanking arrangements" which ban large concentrations of forces and materiel near some borders.
Russia objects to that provision because it limits Russian troop movements within Russian territory, even though Moscow says its border areas have become more unstable since the Soviet Union broke up in 1991.
Russia also wants cuts in Nato troop levels in outlying regions to reflect the accession to the alliance of eastern European states bordering Russia since 1990.
Nato states have said treaty changes depend on Russia withdrawing troops from the former Soviet republics of Moldova and Georgia, but Russia rejects any link between the two issues.