The site, which is a dating service for men and women who are married, was planning a large London-wide campaign on taxis, but the PCO deemed the ad "unsuitable".
IllicitEncounters.co.uk planned to use the tag line: "If you're happy in your marriage, tell your spouse. If you're not, tell someone else's."
Sara Hartley, IllicitEncounters.co.uk spokeswoman, said: "We know there are still thousands of men and women out there who would benefit from our services.
"However, many advertisers have banned our adverts, as they are normally classed as 'adult'.
"The site itself does not carry any mature content, but because of the nature of service, we are often banned from advertising in public areas."
A Toronto-based extra-marital site called AshleyMadison.com commissioned several billboards in the US last year that featured its slogan "Life's too short, have an affair".
The billboards were attacked by moral and religious groups and some were taken down under pressure. Ashley Madison also launched a TV ad at the time.
IllicitEncounters.co.uk has 330,000 members in the UK and has plans to expand internationally.