The Constitutional Court said the fight against terrorism justifies different treatment of those who were born French and those who acquired citizenship.
Existing law allows stripping citizenship only if the person has citizenship elsewhere, and targets especially those convicted of terrorism, if the crimes took place before the person became French or within 15 years of acquiring citizenship.
Franco-Moroccan Ahmed Sahnouni el-Yaacoubi, 45, had his French citizenship revoked last year, following a sentence to seven years of prison in 2013 for criminal association with a terrorist enterprise.
El-Yaacoubi was implicated in a network for recruiting jihadis for various countries. Born in Casablanca, Morocco, he became a French citizen in 2003.
Prime Minister Manuel Valls welcomed the court's "exceptional decision" confirming the state's power to strip French citizenship "every time it's necessary."
Stripping citizenship is a rare procedure in France, occurring only eight times since 1973. Some on the French right and far right recently asked the Socialist government for a change in the law to expand the state's ability to take away French citizenship.
A series of international conventions, including the European Convention of Human Rights, forbid measures that would make people stateless.
However, British law was amended last year to make it legal to deprive foreign-born offenders of citizenship in some serious cases, even if it makes them stateless.
The three radical Islamic gunmen behind Paris attacks this month on newspaper Charlie Hebdo and a kosher market were born in France, as was the man jailed for killing four at the Brussels Jewish Museum last year, and the gunman who killed seven people in 2012 in attacks on a Jewish school and paratroopers.
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