The Paris prosecutor told Reuters that it was investigating suspicions of "aggravated deception".French authorities have opened an inquiry into Volkswagen over the rigging of emission tests.
Last month VW admitted that 11 million of its vehicles were fitted with devices which allowed them to cheat emissions tests.
Shares in VW fell by 3.5% to a four-year-low on Friday, adding to a 43% plunge since the scandal began.
It faces fines of up to $18bn (£11.8bn) in the US and has already put aside €6.5bn (£4.7bn) to pay for the scandal.
Also on Friday, Swiss road authorities put a ban on the sale of new VW diesel cars, as well as used imported ones.
That follows news that in the UK, sales would be suspended of 4,000 vehicles, including Skoda, Audi and Seat brands, thought to be fitted with the cheat device.
In the United States, VW has also stopped the sale of all new diesel cars.
Earlier on Thursday, VW said 650,000 of its vehicles in Italy were equipped with the cheat software and that it would begin to inform customers.
'Deeply shaken'
The European Consumer Organisation has written an open letter to VW's chief executive Matthias Muller, urging VW to take quick action to restore consumer trust.
Its director Monique Goyens wrote: "VW's actions have deeply shaken the trust of consumers in their cars, if not in an entire industry. Millions of car owners have truck-loads of questions about what this sham means for their own vehicle. We want VW to come clean and rebuild confidence with concrete steps."
France's announcement of an inquiry also comes days after a Volkswagen board member said VW staff acted criminally.
Olaf Lies told the BBC's Newsnight programme: "Those people who allowed this to happen, or who made the decision to install this software - they acted criminally. They must take personal responsibility."
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