In videos shared on social media, the woman, a student at Tehran's prestigious Islamic Azad University, was seen protesting outside the campus on Saturday dressed only in her bra and underpants.
Persian-language media outside Iran have reported university security guards harassed her over what she was wearing, ripping her headscarf and clothes. She then took most of them off in protest.
Other footage showed her defiantly walking down the street before plain clothes agents bundled her into an unmarked car and drove her away. It remains unclear where she is being held.
Many activists regard her as a new icon of the struggle for women's rights in Iran, more than two years after the death in custody of Mahsa Amini, following her arrest for an alleged breach of the statutory dress code for women sparked months of nationwide protests.
But Iranian authorities have alleged the student has a mental disorder, a claim activists fear may be a pretext for confining her in a psychiatric institution.
Amnesty International has called for the woman's immediate and unconditional release, saying she "removed her clothes in protest against abusive enforcement of compulsory veiling by security officials".
"I hail the courage of this young woman who demonstrated her resistance and turned herself into an icon for the women's struggle in Iran," French Foreign Minister Jean-Noel Barrot told broadcaster France 2.
Under the dress code mandatory in Iran, women must wear a headscarf and loose-fitting clothes in public.
- 'Tool to suppress dissent' -
In a statement released Tuesday, the Iranian embassy in Paris said that it wanted to address "false information" over the incident. It said initial indications had "shown the student was suffering from family problems and a fragile psychological condition".
"Signs of abnormal behaviour had already been observed by those close to her, including family members and students in her year," it alleged.
Activists accused the authorities of seeking to portray women who protest against the dress code as mentally unstable.
"Iranian authorities systematically use involuntary psychiatric hospitalisation as a tool to suppress dissent, branding protesters as mentally unstable to undermine their credibility," said the director of the New York-based Centre for Human Rights in Iran (CHRI), Hadi Ghaemi.
"Transferring individuals who participate in peaceful protests to psychiatric hospitals represents not only an act of arbitrary detention but also constitutes a form of kidnapping."
News website Iran Wire, which is based outside the country, said the woman was a "seventh-semester French language student" who had no previous history of mental health issues.
The CHRI said several women who took part in the 2022-23 protests had been detained in psychiatric institutions, including Roya Zakeri who was seen shouting "death to the dictator" in the northern city of Tabriz in 2023 after being harassed by morality police over her dress.
On her release, she posted a video insisting she had never been unwell.
- 'Symbol' -
Iranian lawyer and Nobel Peace laureate, Shirin Ebadi, accused the authorities of "repeating the same threadbare scenario that the protester has a mental disorder".
"The transfer of citizens to mental hospitals by the security apparatus is an example of the most severe torture," she wrote on her official Telegram channel.
She said what had happened was "short and painful".
"A female student took off her clothes after university security forces attacked her and tore her clothes to impose the mandatory hijab," she said.
Fellow Nobel Peace laureate Narges Mohammadi, who remains in Tehran's Evin prison, said the student had turned her body into a "symbol of dissent".
"Women pay the price for defiance, but we do not bow down to force... I call for her freedom and an end to the harassment of women," Mohammadi said in a message from prison posted on her social media channels.
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