Amina Wadud, a professor of Islamic studies at Virginia Commonwealth University, led the service on Friday before a congregation of 80 to 100 men and women at Synod House at the Cathedral of St. John the Divine in Manhattan, an Episcopal church.
Three mosques had refused to hold the service, and an art gallery backed out after receiving a bomb threat. Organizers said the service was intended to draw attention to the inequality faced by Muslim women.
The Egyptian newspaper, Al-Messa, reported the service on its front page, with the emphatic headline: "They are tarnishing Islam in America!" It referred to Wadud as "the deranged woman."
A female Islamic law professor condemned the act as apostasy, explaining that a woman's body "stirs desire" in men. Some suggested the event was a U.S. conspiracy to mold traditional Islam into a secular American religion.
Muslims are required to pray five times a day. On Friday, the Muslim holy day, many try to perform their midday prayers at a mosque. A male imam leads the prayer, followed by lines of men and, behind them, women. Most mosques have different halls, or different floors for the women, as well as separate entrances.
Sheik Sayed Tantawi, head of Egypt's Al-Azhar mosque, the leading Sunni Muslim institution, said Islam permits women to lead other women in prayer but not a congregation that includes men.
Many of the women who attended the service in New York were modestly dressed and, in accordance with Islamic tradition, covered their hair with the hijab, or head scarf. Wadud conducted the service primarily in English with verses of the Quran read in Arabic.
"Women were not allowed to (have) input in the basic paradigms of what it means to be a Muslim," Wadud said after the service. She added that while the Islamic holy book, the Quran, puts men and women on equal footing, men have distorted its teachings to leave women with no role other than "as sexual partners."
But in the conservative Middle East, Wadud's prayer service was frowned upon.
In Saudi Arabia, Grand Mufti Abdul-Aziz al-Sheik spoke out against it in Friday prayers at a Riyadh mosque.
"Those who defended this issue are violating God's law," he said. "Enemies of Islam are using women's issues to corrupt the community."
Soad Saleh, who heads the Islamic department of the women's college at Al-Azhar University, considered the act an apostasy, which is punishable by death in Islam.
"It is categorically forbidden for women to lead prayers (if they include men worshippers) and intentionally violates the basics of Islam," she said.
She said women should not lead prayers because "the woman's body, even if veiled, stirs desire."
Saleh also suggested the prayer service was a ploy to weaken Islam.
"It's a foreign conspiracy, through secular (Muslim) organizations, to sow seeds of division between Muslims," she said. "But God will protect his religion."
Abdul-Moti Bayoumi, of the Islamic Research Center at Al-Azhar, said Wadud had carried out "a bad and deviant innovation" that contradicted the Prophet Mohammed's sayings and deeds.
Not allowing women to lead mixed gender prayers "is not discrimination between women and men but is to safeguard men from being conflicted and torn by human desire while they are standing behind a woman while she's bowing and kneeling," Bayoumi said.
The prayer service and reactions of those who attended were covered by the two major Arab satellite networks, Al-Jazeera and Al-Arabiya.
One Web site known for postings by Islamic militants carried photos of women at the service who had failed to cover their heads.