The petition appeared online after Miss Universe Canada announced in a brief statement last week that Jenna Talackova of Vancouver "did not meet the requirements" to compete in the pageant.
The petition maintains she was disqualified for being transgendered.
By late Monday, more than 23,000 had signed the petition.
"This is discriminatory, unjust, and quite frankly disgusting," states the petition started by a person identified as Oscar Dimant of Brooklyn, N.Y. "She is a woman and deserves to be treated as any other woman would be."
But officials with Miss Universe Canada have denied the discrimination claims, saying the pageant's rules set by the Miss Universe franchise state that each contestant must be a "naturally born female."
Talackova was reportedly disqualified on March 13, after she admitted to a pageant organizer who had grown suspicious about her gender, that she was born a male.
The controversy has raised Talackova's profile considerably, with pictures and YouTube videos of the six-foot-one-inch blond getting plenty of clicks. News outlets in the United States, Britain, Canada and elsewhere have picked up the story.
In an interview posted on YouTube during the Miss International Queen 2010 contest in Thailand, Talackova said she knew at a very young age that she was female and started hormone therapy when she was 14.
She said she went through gender reassignment surgery when she was 19.
The Miss Universe Canada pageant was created in 2002 by Beauties of Canada, which says it holds the exclusive rights to send contestants to the Miss Universe Pageant.
According to the pageant's website, contestants must meet the basic requirements of being a Canadian citizen and at least 18 years old but under 27 by Feb. 1, 2012.
Marie Little, chair of the Trans Alliance Society, a group that promotes gender diversity in Vancouver, said she believes the incident is a "clear case of discrimination."
Little said Talackova is a "natural-born woman" because her brain was structured before her birth.
"We are born this way," she said. "It's just an accident of birth that the body disagrees with the brain."
Women compete in pageants not just because of ego, but because of the prizes, publicity and the future employment opportunities such contest bring, she said.
Keeping women like Talackova out of such events could hurt their future employment opportunities, she suggested.
"Once upon a time we had black and white baseball leagues," said Little. "Now blacks and whites compete in the same league."
Forced to navigate a "media storm," Talackova is now being assisted by the Vancouver-based public relations specialist Rory Richards.
Richards said in an email that Talackova is not making any public statements but will publish a media statement later this week after obtaining legal counsel.
"Jenna is overwhelmed, and deeply moved by the support she has received from around the globe," said Richards. "But especially from fellow Canadians that have said how proud they would be if she represented Canada in the Miss Universe Pageant."
Talackova has posted several comments on her Twitter account, however.
She has Tweeted that she feels the support and wants people to sign the petition.
"Disqualified for being born? Really? I don't think so...," she Tweeted on March 21.