Sgt. Luis Jimenez was suspended because of comments he posted on social media defending the photo, which was taken at a guard training facility, spokesman Maj. Paul Rickert said.
"He has been suspended from his duties as a funeral honors team member until the investigation is complete," Rickert said.
Jimenez' comments have since been taken down, but in a screen shot confirmed by Rickert he defended the woman who originally posted the photo.
"She isn't disrespecting anyone," Jimenez wrote of Spc. Terry Harrison. "... It's actually a selfless commitment she has made. These practice sessions are very long. It's good to let loose a little. When your job constantly asked you to be serious. And no there's no one in the casket."
Jimenez was Harrison's task leader, or supervisor, in the Madison, Wis.-based 1st Battalion, 147th Aviation Regiment. Harrison also was suspended.
No public telephone number for Jimenez could be found. Rickert said he would pass on a message from The Associated Press seeking comment.
The photograph shows soldiers mugging for the camera around the empty casket. It shows 14 men and women posing, some lightheartedly. Two pairs of men hug playfully, another man has his back turned and is pointing off in the distance, and a kneeling woman flashes a peace sign.
The caption reads, "We put the FUN in funeral - your fearless honor guard from various states."
The photo, which originally was posted on Instagram, has sparked a furor online, drawing angry comments from people calling the picture disrespectful of veterans and those killed in action.
Rickert wouldn't say whether any other Wisconsin soldiers would be reprimanded, saying he couldn't comment while the investigation was ongoing.
Gen. Frank J. Grass, head of the National Guard Bureau in Washington, D.C., said Wednesday he ordered the investigation to what he called a "disgraceful incident."
"This image is in very poor taste and clearly does not represent the values of the National Guard," he said in a statement. "I am confident the Army National Guard will quickly resolve this matter and take swift and appropriate action. Funeral duties are sacred and America's fallen deserve nothing less than our deepest respect."
Attempts to reach Harrison by phone and email have been unsuccessful. The National Guard has taken steps to protect her after she received death threats through social media and other means, Rickert said.
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