Ah, the varying definitions...
"Illegal"? Not in any way. You are violating no laws by enabling tethering on your phone. Period.
"In violation of a civil contract between you and your cell phone service provider"? Depends. By the wording, I'm assuming you mean "Is it a bad thing to enable tethering without using the method provided by my carrier, complete with its increased monetary cost?"
If your carrier offers tethering, and you choose to use the tethering option provided by your carrier (whether it costs extra or not,) then obviously it's okay.
If your carrier offers tethering and you choose to use an unsupported method to enable it without their permission; or if your carrier does not offer tethering, and you use any method to enable it, you are violating your contract with your carrier.
Is this "illegal"? No. Is this grounds for them to terminate your service whenever they feel like it, possibly invoking an early termination fee? Yes. Will they do it? Who knows.
If you're willing to risk your carrier terminating your service, possibly hitting you with an early termination fee for violating your contract; go right ahead.
But to phrase it as "Is tethering illegal?" is just being alarmist. Either you honestly don't know the law, and thought the FBI would come bashing your door down; or you like making mountains out of molehills to make yourself look more like a rebel. Whatever.