"What the French did in Algeria was genocide," Mr. Erdogan said Friday in a heavily personal speech, laced with criticism of French President Nicolas Sarkozy.
He alleged that beginning in 1945, about 15 percent of the population of Algeria was massacred by the French. He also said Algerians were burned in ovens.
"They were mercilessly martyred," he said.
Erdogan appeared to be referring to allegations that the French burned the dead in ovens after a 1945 uprising that began in the Algerian town of Setif. Algerians say some 45,000 people may have died. French figures say up to 20,000.
The French bill's passage "is a clear example of how racism, discrimination, and anti-Muslim sentiment have reached new heights in France and in Europe," Erdogan said. "French President Sarkozy's ambition is to win an election based on promoting animosity against Turks and Muslims."
France holds presidential elections in April.
Turkish Foreign Minister Ahmet Davutoglu said the French vote was comparable with attempts by Mideast rulers to stifle free speech.
"Europe has philosophically and ideologically reverted to the Middle Ages," Mr. Davutoglu said at a conference of Turkish ambassadors in Ankara, the capital.
France formally recognized the Armenian killings as genocide in 2001, but had previously provided no penalty for anyone refuting that. The bill sets a punishment of up to one year in prison and a fine of 45,000 euros ($59,000) for those who deny or "outrageously minimize" the killings, putting such action on par with denial of the Holocaust.