Stallone was spotted by Harvard student Anthony Zonfrell, 20, who was on holiday in Italy with his family.
He said: “My cousin had told us about how she had seen it when she went, so we were on the lookout.
“As soon as we saw the painting, we knew it was him. My whole family went into shock. My mother was taken to hospital. The whole Vatican had to be evacuated.”
When Anthony, who is from the US, returned from his holiday he uploaded the photograph to community website Reddit.
It has become a viral hit, having been viewed more than 700,000 times.
Anthony added: “I posted it at night, and when I woke up it was on the front page.
“I was shocked at the response it got, it really blew up quite fast. All of the comments were interesting. We’re still unsure how Stallone could appear in a painting completed in the 16th century. Has he uncovered the secret of time travel? Is he an angel?”
The Cardinal and Theological Virtues is a 1511 fresco adorning one of the Raphael Rooms at the Vatican.
It depicts Pope Gregory IX approving the Vatical Decretals with Hollywood hard-man Sylvester Stallone, 65, looking on.
Raphael was commissioned to decorate four reception rooms in the Apostolic Palace in the Vatican City.
They later became known as the ‘Stanze di Raffaello’, which means Raphael Rooms.
The Cardinal and Theological Virtues, which was painted in 1511 and represents a combination of law and religion, makes up one wall in the ‘Stanza della Segnatura’ room.
It is thought Raphael, who lived from 1483 until 1520, only sketched the outline of the fresco, with team member Lorenzo Lotto carrying out the Stallone paintwork.
As soon as news broke of the disturbance in the Vatican, Stallone was taken by the US government to a secure location for testing. The star of such hits as, Rocky and Rambo, and the upcoming Expendables 2 & 3, hasn’t been seen since.