The "civic integration" test, part of a broader government policy shift on immigration, came into effect in February.
It includes the compulsory viewing of a film which includes scenes of gay men kissing and topless women.
Critics say the film, which forms part of a study pack for would-be immigrants, is designed to discourage applicants from Muslim countries who may be offended by its content.
Arzu Merali, spokeswoman for the London-based Islamic Human Rights Commission, says the test indicates that Muslims are not welcome. People seeking entrance from other EU countries, the US, Canada, Australia, New Zealand and Japan do not have to take it.
"Sadly the Dutch authorities are now openly exhibiting the type of Islamophobia that sends a very clear message to wider society," Merali said. She said the message is that new Muslim immigrants are unwelcome, as are those already present who do not conform to a uniform idea of a Dutch citizen.
But Maud Bredero, spokeswoman for the Dutch ministry of justice for integration policy, denied that was the case. "Everyone is welcome," she said.
According to the Dutch Central Bureau of Statistics (CBS), 54% of all non-Western foreigners living in the Netherlands are Muslim, 95% of them originating from Turkey, Africa, Latin America and Asia.
Rita Verdonk, the immigration minister, said the latest initiative is aimed at instilling Dutch values.
"It is important that you not be afraid to make clear demands of people - that they subscribe to our European values, that they respect our laws and learn the language," she said.
After viewing the 105-minute film, which is available in most languages, applicants are required to take an exam - costing $417 - on facts about the country such as its provincial structure, Queen Beatrix's monarchical functions and the role of William of Orange in Dutch history.
Applicants need a basic command of the Dutch language and will be tested on their knowledge of Dutch culture.
"Verdonk does not see migrants as people enriching our culture and country... That is why she ordered this film"
Karel Steenbrink, a theologian based at Utrecht University in the Netherlands, describes the immigration minister's move as "strange".
"Verdonk does not see immigrants as people enriching our culture and country ... That is why she ordered this film," he said.
The professor questioned the inclusion of some of the more graphic images in a general film on the Netherlands.
"You can only see it [topless women] a few weeks a year in the Netherlands because it is so cold here," he said, "and then only in restricted places. You seldom see it.
"Verdonk knows the reaction to the film would be one of fear, anger ... she works like that."
Verdonk has also said that the Netherlands may introduce penalties for long-term residents or citizens who fail language or culture classes.
Steenbrink said: "The whole package - the film, Dutch language courses, higher cost of a visa, et cetera - has already reduced the number of immigrants. Even asylum-seekers are affected."
Applicants are quizzed on Queen
Beatrix's monarchical functions
Immigrant numbers fell by 25% last year, Steenbrink said, quoting figures released by the statistics bureau.
The Netherlands can ill-afford this situation, he said, because the percentage of people over the age of 75 is increasing.
"How are we to keep the country running if there is no immigration? Dutch society, in the short and long term, could have quite a lot of problems. Therefore, I personally think we will need, in the future, more and more immigrants.
"Signs such as this video, saying we do not like to have people coming in, unless they are 100% adjusted to our society, sends the wrong message."
"We do not want to reduce the amount of newcomers, but we do encourage them to learn about our country and language in order to get better positions in this society"
Spokeswoman, ministry of justice for integration policy
Bredero, the Dutch ministry spokeswoman, disagrees.
"We do not want to reduce the amount of newcomers, but we do encourage them to learn about our country and language in order to get better positions in this society," she said.
She said immigrants are still disadvantaged in the Netherlands.
"Many are unemployed, [live in] poor housing and not able to guide their children at school. There are also many people isolated because of the language problems. Next to this, the Dutch government would like immigrants to know more about our country [historically, socially and politically] before arriving."
However, EMCEMO, an organisation in the Netherlands that helps settle immigrants, questions whether the measures are educational. It says the test is designed to provoke and has only one goal: to stop the flow of immigrants, especially by Muslims from countries such as Morocco and Turkey.
Social and religious tensions in the Netherlands have increased recently.
The situation was aggravated by the killing of Theo van Gogh, the film director, by a Dutch-Moroccan man in 2004, after van Gogh made a film accusing Islam of condoning violence against women.The government is also studying whether it can implement a ban on the burqa - a covering worn by some Muslim women that covers the head and face - which was approved by parliament in December.