Triggering Article 155 would allow Rajoy to suspend Catalonia's devolved government and take over control from Madrid.
Rajoy gave Puigdemont until Monday to clarify whether the declaration of independence is real - and, if it is, until October 19, eight days from now, to either back down or be deposed.
"The cabinet has agreed to require formally to the Catalan government to confirm whether it has declared or not independence", Rajoy said in a televised address.
The prime minister's carefully worded statement was responding to Catalan President Carles Puigdemont's announcement late on Tuesday that he had a mandate to push for independence but would hold off while seeking talks with the Spanish government over the future of his region.
Prime Minister Rajoy doesn't know, either.
On Wednesday, a government source who refused to be named said "all options" were on the table as crisis talks were under way.
If the answer is yes, he is likely to invoke Article 155 of the Spanish constitution, enabling Madrid to suspend Catalonia's political autonomy.
On Tuesday, Puigdemont read out "Declaration of the representatives of Catalonia" at a plenary session of Catalan MPs. "The Catalan separatist leader was very clear about asking for dialogue".
"Yesterday I tried to send a message of calmness and to remind people that we are facing a political problem that we need to solve with politics and not with police", he said.Hundreds of people were injured in Catalonia on October 1 as Spanish national police sought to prevent the referendum going ahead.
"Mr Puigdemont - no one - can expect to impose mediation without returning to legality or democracy", Deputy Prime Minister Soraya Saenz de Santamaria told reporters.
"We call on global states and organisations to recognise the Catalan republic as an independent and sovereign state", he said.
Mr Rajoy said his government had asked the regional government to clarify whether or not it had declared independence.
Catalonia is relatively wealthy, and the loss of the region would be a blow to the Spanish economy.
But on Wednesday morning, the Spanish stock market rose 1.16 percent on hopes for a breakthrough in the crisis.
Spain and Catalonia now enter into the unknown, as Madrid has repeatedly said independence is not up for discussion.
But a 2010 move by Spain's Constitutional Court to water down a statute that gave Catalonia additional powers, combined with a deep economic meltdown in Spain, sparked a surge in support for independence.