The court in Nimes on Friday cleared Dieudonne M'Bala M'Bala, a 38-year-old of French-Cameroonian parents, by saying the two lawyers who said they were offended by his statements made to Le Monde newspaper could not claim to have been personally targeted by the words.
The prosecution said it would appeal to the highest appeals court.
The acquittal was another legal victory for the comedian, who is known in France simply as Dieudonne, following a Paris court's verdict in May rejecting a charge of racial defamation by Jewish lobby groups accusing him of racism in a television skit.
He faced a fine of 5000 euros ($6700).
In the skit, Dieudonne dressed up as an Orthodox Jew and gave a Nazi salute.
He later defended the skit by saying he had similarly caricatured other religions and, while not anti-Jewish, he was critical of Israeli policies and had a right to express himself freely for the purpose of humour.
That court ruled that the routine, aired a year ago, targeted only right-wing Israelis and not Jews as a whole. Although the charges against the comedian have not stuck, he was forced to cancel a number of shows this year following a campaign by French Jewish groups.