Provided is an apparatus and method for controlling a portable terminal. The apparatus includes a contact sensing unit which senses an area of an external surface of the portable terminal contacted by a user as the user holds the portable terminal, a recognizing unit which recognizes a function mode of the portable terminal based on information about the contacted area sensed by the contact sensing unit, and a control unit which changes the portable terminal to a function mode recognized by the recognizing unit. Since a function mode of the portable terminal is controlled according to the way a user holds the portable terminal, convenience of changing a function mode of the portable terminal is provided through a single manipulation.