The painting, called The Head of Christ, has hung outside the principal's office of Bridgeport high in West Virginia for 37 years.
But two civil liberty groups - Americans United for Separation of Church and State and the West Virginia American Civil Liberties Union - said it had to go.
They said the painting suggested the school endorsed Christianity as its official religion and filed a lawsuit in June to have it removed.
Locals thought the theft last month would mean the end of the matter but the county's board of education has vowed to continue to fight the lawsuit.
No public money will be used for the case but the Christian Freedom Fund has raised more than $150,000 (pound;79,000) for a defence fund, including $6,700 from pupils at the school.
Mike Queen, a school board member, said: "We have decided to step up to the plate here. This is important to us and reflects what our community wants in the schools."
The civil liberties groups argued that they represented local people who did not want schools to propagate any religion.
Meanwhile, the police were left bemused. "Now that the picture's gone, is it (the court case) moot?" asked Superintendent Carl Friebel. "We're all in uncharted water here."
The school board hopes the community will help identify the thief and Superintendent Friebel said local churches had offered to replace the painting.
Bridgeport has a population of 8,000 people and is served by 40 churches.
Pattae Kinney, whose daughter attends the school, said: "Our country was founded on Christian principles. It's on our money - 'In God We Trust' - it's in our Pledge of Allegiance, it's part of our lives. I know our community and we're very in favour of keeping this painting."