Demonstrators chanted anti-French slogans, denouncing the Sinhalese-language movie "Flying Fish" and the embassy for showing it at the French film festival organised to coincide with Bastille Day celebrations.
"If you sleep with dogs, you will wake up with fleas," said posters in faulty French.
The organisers of the protest accused France of supporting Sri Lanka's defeated Tamil rebels.
The defence ministry has said that the film, even though approved by civilian censors for screening to an invited adult audience at the festival, was insulting to security forces.
The festival was stopped Saturday by the management of its state-owned venue after the screening of "Flying Fish", a family drama set during the ethnic war in the island's northeast.
A defence ministry official told reporters the film had been "banned" in Sri Lanka and producers had no permission to use military-type uniforms in the movie.
However, the French embassy said it had clearance from the official cens