The 44-year-old actress Rania Youssef appeared at Cairo Film Festival on Thursday wearing a black leotard covered by a see-through overdress with criss-cross detailing and a large bow belt, the Telegraph reported.
She could be jailed for up to five years if found guilty, a judicial source told AFP, BBC reported.
Rania Youssef has apologised and said she would not have worn the dress if she had known it would cause such controversy.
The charges were brought by two lawyers Amro Abdelsalam and Samir Sabri, who are known for taking celebrities to court, the report said.
Youssef's appearance "did not meet societal values, traditions and morals and therefore undermined the reputation of the festival and the reputation of Egyptian women in particular", Mr Sabri told AFP.
The Egyptian Actors' Syndicate also criticised the "appearance of some of the guests", which it said "undermined the festival and the union".
In a social media post, the actress said she had "probably miscalculated" in choosing to wear the dress.
She will be tried on January 12 in a court in Cairo, where she faces up to five years if convicted, the Telegraph report said.
Youssef’s arrest is the latest in a long line of cases of Egyptians falling foul of the country’s more religious elements.
An Egyptian court last year sentenced an Egyptian singer Shyma to two years for inciting debauchery after she appeared in a music video in her underwear suggestively eating a banana and in 2016, author Ahmed Naji was handed a two-year prison sentence after being charged with obscenity for publishing a book with references to sex and drugs, the report said.