She has claimed that the campaign appears to be inspired by her "7 rings" music video, reports people.com.
The singer is asking for $10 million for the supposed misappropriation.
In the complaint, Grande, 26, has alleged that after she declined to participate in an endorsement deal in early 2019, Forever 21 and its sister brand, Riley Rose, used her "name, likeness and other intellectual property to promote their brands for free".
She had turned down the deal because the compensation offered by Forever 21 for proposed social media marketing was "insufficient for an artist of her nature".
Earlier this year, Forever 21 launched a campaign that allegedly capitalised on the success of Grande's album "Thank U, Next" and featured copied scenes from her "7 rings" music video.
According to the lawsuit, Forever 21 published "at least 30 unauthorised images and videos misappropriating Ms. Grande's name, image, likeness, and music in order to create the false perception of her endorsement".
It is also being claimed that the fashion brand hired a model who looked like Grande and wore her hair in the same double buns style that the singer did in the "7 rings" music video. They also used lyrics and audio from "7 rings" in Instagram posts without her permission.
The Instagram posts were deleted by Forever 21 in April.
( With inputs from IANS )