The case was brought by the Paris Grand Mosque, the Union of Islamic Organisations of France (UOIF) and the World Islamic League.
"The court's verdict accords with the French republic's values and is good for French society as a whole" the press freedom organisation Reporters Sans Frontiers (RSF) said.
"We hail the judges' finding that the limits of free expression were not exceeded in this case. This ruling is a victory for press freedom and in no way is a defeat for a community. We hope it will set a judicial precedent".
The UOIF announced that it would appeal to the ruling but the Paris Grand Mosque said it would not.
The outcome of this trial follows a similar decision by Danish judges acquitting the editors of the Danish daily Jyllands-Posten, the first newspaper to publish controversial cartoons of Mohammed.
In the French case, the three plaintiffs had demanded 30 thousand euros in damages from Charlie Hebdo, while the French public prosecutor's office had recommended acquittal.
Val had additionally faced a possible sentence of six months in prison and a fine of 22 thousand 500 euros. As he left the court today, he expressed his satisfaction and confidence in the French judicial system, commenting: "We have been vindicated by the court".
The lawsuit concerned three of the six Mohammed cartoons, which the weekly published on 8 February 2006. Two of the three had appeared in Jyllands-Posten in 2005.
One of them showed Mohammed wearing a turban in the form of a bomb about to explode. The other showed him saying: "Stop, stop, we have run out of virgins."
The third, which was on the cover, was by French cartoonist Jean "Cabu" Cabut. It showed Mohammed with his head in his hands saying: "It is hard to be loved by idiots".(EÜ)
