A regional government official wrote in a rejection letter this month that the scarf worn by Chetouani El Khamsa was a sign of Islamic fundamentalism, her lawyer Pascale Torgemen said on Thursday.
Torgemen said El Khamsa planned to appeal and to file a suit for what she contends is a discriminatory, racist and sexist decision.
"Does this mean that a man with a beard is systematically Islamist, a fundamentalist?" the lawyer said.
El Khamsa has lived legally in France - where her four children were born - since 1997, employed by her husband's business. To replace her current residence card, which must be renewed annually, she wanted a residency permit that is valid for 10 years, like the one accorded her husband.
But in a 2 November letter refusing her the 10-year card, Francois Praver, sub-prefect in the town of Raincy outside Paris, noted that during her interview, El Khamsa wore a headscarf "entirely covering your neck and the roots of your hair, comparable to a hijab, sign of belonging to a fundamentalist Islam".
The lawyer gave a copy of the letter to The Associated Press.
France, looking to uphold its secular foundations, last year banned Muslim headscarves and other conspicuous religious symbols from public schools. But the ban does not apply outside of classrooms.
Interior Minister Nicolas Sarkozy has said women cannot wear head coverings in official identity photos. But Torgemen said that her client does not wear her scarf for official photos - her head is uncovered in her Moroccan passport.
Torgemen said she had not previously heard of a case of women being refused the 10-year residency card because their heads are covered.
El Khamsa and her family are "people without a history, without problems", the lawyer said.
"For me, this is discrimination. They compare the fact that one wears a scarf to fundamentalist Islam," she said.