The accusations against PSA are the latest chapter in a huge scandal which erupted in September, 2015.
The carmaker vowed to "defend its interests" as a spokesman insisted PSA "respects regulations in all countries where it operates."
The spokesman added its vehicles had never been equipped with emissions detection software enabling it to cheat pollution readings.
A judicial source told AFP the Paris prosecutor on April 7 opened an investigation into claims that PSA might have rigged controls which could "render its merchandise dangerous for human or animal health".
PSA said it "noted" the prosecutor's action and added it would "defend its interests and those of its 180,000 workforce, its customers and partners".
Fraud investigators have levelled similar allegations at PSA's French rival Renault, part government-owned and accused of cheating on pollution tests for diesel and petrol engines for over 25 years with the knowledge of top management.
Renault has denied the claim.
The French are also looking into allegations surrounding Volkswagen and Fiat-Chrysler.
France started investigating after some of Renault's models, along with those from other carmakers, were found to spew out too many harmful emissions in random tests under real-world conditions last summer.
Experts running the probe said they could not rule out other carmakers besides Volkswagen using cheating devices in test conditions.
The accusations against PSA are the latest chapter in a huge scandal which erupted in September, 2015, when Volkswagen, Europe's biggest carmaker, admitted to fitting 11 million cars -- 8.5 million in Europe -- with devices allowing them to fool emission tests.
PSA, which owns marques including Peugeot, Citroen and DS, earlier this year bought Opel and Vauxhall in a bid to create a European champion in the auto industry in a move to regain its position as Europe's second-biggest car manufacturer in Europe after Volkswagen group, overtaking Renault.