In her complaint, Alison Carey referred to claims in the book that she gave 12-year-old Mariah Valium, tried to pimp her out and threw boiling tea on her.
Alison denied the claims, saying Mariah "presented no evidence to substantiate these serious allegations".
The pop star published The Meaning of Mariah Carey in September.
Alison, who was 20 at the time the alleged events took place, filed her two-page legal complaint at New York Supreme Court on Monday.
It said the "outrageous" material in Mariah's book was meant to "humiliate and embarrass" her sister.
Mariah used "her status as a public figure to attack her penniless sister, generating sensational headlines describing her lurid claims to promote sales of her book", Alison claimed.
She is now seeking damages for the "heartless, vicious, vindictive, despicable and totally unnecessary public humiliation".