CCTV showed a man with a baseball cap snatching the badge from the car parked outside Alfie Connor’s home in Pudsey, Leeds.
The youngster, who has leukaemia, needs the badge so that his parents can park close to hospital.
Alfie needs to have regular chemotherapy sessions for his condition, sessions that leave him physically drained afterwards and in a severely weakened condition.
His mother Nicola said: “The badge has his photo on it, so whoever has taken it knows that it’s for a child. It’s really sick.
“We’ve been told that they would be able to sell it on, but I don’t know how anybody could knowingly use a badge that had been stolen from a disabled kid.”
The badge was stolen in the early hours of Friday, June 14.
It was taken shortly after Alfie had officially opened a new play pavilion next to the children’s cancer ward at Leeds General Infirmary.
The thief struck at about 1.50am – ignoring a pair of designer Louis Vuitton sunglasses that had been left on one of the car’s seats.
He later returned to the vehicle and make off with a sports bag, which contained an iPod device belonging to the family.
As a result of the theft the family are now having to park some distance from the hospital for Alfie’s fortnightly appointments while they wait for a replacement badge.
PC Steve Jones, neighbourhood investigator for Pudsey, said: “This was a particularly heartless and desperate offence which has only added to the difficulties faced by Alfie and his family.
“To attack a vehicle for a disability parking badge is absolutely thoughtless and we need the assistance of the public to help trace those responsible.”
Anyone with information should call police on 101 or Crimestoppers anonymously on 0800 555 111.