The New Forces rebels said in a statement on their website that they seized Toulepleu on Sunday.
The statement said: "The large town of Toulepleu in the west of Ivory Coast is now in the hands of the army of the New Forces (rebels) since Sunday at noon following an intense combat."
The town near Liberia's border was the scene of heavy fighting on Sunday between forces backing the political rivals who both claim to be Ivory Coast's president months following a disputed election.
The rebels are backed by the UN-recognised president, Alassane Ouattara, while government forces are allied with Laurent Gbagbo, who is refusing to step down.
Gbagbo has been in power for more than a decade and his security forces - who insist they are still holding Toulepleu - are accused of abducting, torturing and killing political opponents.
Saah Nyuma, the deputy director of the Liberia Refugee Repatriation and Resettlement Commission, said he heard the sounds of explosions coming from Ivory Coast and that at least one mortar shell fell on the Liberian side of the border on Sunday.
Analysts fear the political crisis could spill over into a full-blown civil war.
Nearly 400 people have been killed since the November 28 vote, according to a UN and an Associated Press tally of bodies.
The UN refugee agency says more than 200,000 people have fled fighting in Abidjan in the last week, and more than 70,000 have crossed the border into Liberia to avoid fighting in the country's west.
Over the weekend, gangs of young people aided by uniformed police ransacked houses in Abidjan belonging to officials allied with Ouattara.
And on Thursday soldiers fatally shot six women who were protesting against Gbagbo's refusal to step down.
Governments around the world swiftly condemned the killings, with Britain's foreign office minister for Africa, Henry Bellingham, saying he was "deeply concerned" about the deteriorating security situation in Cote d'Ivoire.
He also said he was "appalled" to hear that women were killed during a peaceful demonstration.