The Islamic Commission of Spain timed its fatwa on Friday to coincide with the first anniversary of the attacks, which killed 191 people and were claimed in the name of al-Qaida in Europe.
The commission's secretary-general, Mansur Escudero, said the fatwa had moral rather than legal weight and hoped it would spur similar pronouncements from Muslim groups worldwide.
"We declare ... that Usama bin Ladin and his al-Qaida organisation, responsible for the horrendous crimes against innocent people who were despicably murdered in the 11 March terrorist attack in Madrid, are outside the parameters of Islam," the commission said.
The commission, whose elected leaders represent the Muslim community in talks with the government, said the Quran barred Muslims from committing crimes against innocent people.
"The reaction of Muslims has been: 'How do you dare to do this (fatwa)? You are putting your lives in danger'," Escudero said.
"Some might question our authority to do it, but no one has denied our arguments"
Mansur Escudero, secretary-general of the Islamic Commission of Spain
"But so far, I have not seen any Muslim who opposed it. Some might question our authority to do it, but no one has denied our arguments."
Muhammad Chaib, head of the Ibn Batuta Socio-Cultural Association for Muslim immigrants, supported the condemnation of Bin Ladin but said the Muslim community's priority should be integrating into Spanish society, not making political statements.
Most of the 41 suspects still held in the investigation into the bombings are of Moroccan origin. Investigators say they were committed to fighting the West.
Another suspect was released on bail on Friday after being accused of cooperating with an armed group.
Many Muslims have felt isolated
after the Madrid train bombings
"The terrorist acts of Usama bin Ladin and his al-Qaida organisation ... which result in the death of civilians, such as women and children ... are totally prohibited and are the object of strong condemnation within Islam," the commission said in a statement quoting extensively from religious texts.
It issued its fatwa as Spaniards paid tribute to the passengers killed on four Madrid commuter trains a year ago.
At Madrid's main mosque, worshippers observed a minute's silence before Friday prayers, and Morocco's King Muhammad attended a wreath-laying ceremony in honour of the victims.
At least half a million Muslims live in Spain and many have felt increasingly isolated as a result of the 11 March 2004 bombings.
Twelve Muslims were killed in the attacks.
"If we analyse [Bin Ladin's] actions, we see they have only caused harm and pain to the Muslim world," said Escudero, a Spaniard who converted to Islam in the 1970s. "Some Muslims even wonder whether he is an invention of the enemies of Islam."
"The terrorist acts of Usama bin Ladin and his al-Qaida organisation ... are totally prohibited and are the object of strong condemnation within Islam"
Islamic Commission for Spain
Bin Ladin's stated aim of recovering al Andalus - the Arabic term for Spain during the nearly 800 years parts of the country were under Moorish rule - "totally contradicts God's will", the commission added.
"If there are reprisals from this group or any other, then I am willing to accept them. I am not afraid," said Escudero.
"I only fear God, and He is the best protector."