About 1,000 servicemen and women, including some 20 retired generals, put their names to the letter.
It blamed "fanatic partisans" for creating divisions between communities, and said Islamists were taking over whole parts of the nation's territory.
Ministers have condemned the message published in a right-wing magazine.
The letter was first published on 21 April - the 60th anniversary of a failed coup d'état.
"The hour is grave, France is in peril," the signatories said.
Far-right leader Marine Le Pen, a candidate in next year's presidential election, has spoken out in support of the former generals.
But the minister in charge of the armed forces, Florence Parly, tweeted: "Two immutable principles guide the action of members of the military with regard to politics: neutrality and loyalty."
She earlier warned that any signatories still serving in the military would be punished for defying a law that requires them to remain politically neutral.
It warns French President Emmanuel Macron, his government, and MPs of "several deadly dangers" threatening France, including "Islamism and the hordes of the banlieue" - the impoverished immigrant suburbs that surround French cities.
The signatories go on to blame "a certain anti-racism" for splitting up communities, and seeking to create "racial war" by attacking statues and other aspects of French history.
They also accuse the government of seeking to use the police "as proxy agents and scapegoats" by brutally repressing the popular "gilets jaunes", or yellow vest protests of recent years.
"It is no longer the time to procrastinate, otherwise tomorrow civil war will put an end to this growing chaos and deaths - for which you will be responsible - with numbers in the thousands," the letter concludes.
In a country which pays for several thousand former generals on the retired and reserve lists, the support of just 20 of them to such explosive language does call for a sense of perspective, the BBC's Hugh Schofield in Paris says.
Nonetheless, that the letter was written at all is a sign of dangerous times, and the backing of Marine Le Pen means the themes will continue to resonate in the year of campaigning that lies ahead, our correspondent says.
Members of the French military, whether actively serving or reservists, are forbidden from expressing public opinions on religion and politics, and Ms Parly has called for those who signed the letter to be punished.
"For who have violated the duty of reserve, sanctions are planned, and if there are active soldiers among the signatories, I asked the chief of staff of the armed forces to apply the rules... that is to say, sanctions," the minister told radio network France Info on Monday.
Ms Parly cited the case of a former general in the Foreign Legion who was expelled from the military for taking part in a protest against migrants in Calais.
Minister of Industry Agnès Pannier-Runacher told France Info she "unreservedly condemned" the generals "calling for an uprising... 60 years to the day after the generals' putsch against General de Gaulle".
The failed coup d'état involved generals seeking to prevent Algeria - then a French colony - from gaining independence.
But French nationalist politician Marine Le Pen welcomed the letter, calling on the generals to join her in "the battle of France".
Her response came on the same day as a fatal knife attack at a police station south-west of Paris, which is being treated as a possible terrorist attack.
Many in the French media are expressing surprise that Marine Le Pen came out in support of the generals.
Cosying up to would-be putschists is what her father was supposed to specialise in. He was the one who was close to the anti-Gaullist hardliners of 60 years ago. He was the one who loved to flirt with illegality. Not Marine and her new-look National Rally.
So has she miscalculated? Some think so.
Coming out for a group of ex-generals - even of the armchair variety - who are so obviously overstepping the bounds and dabbling in politics - this makes it much easier for President Macron to paint her as a traditional French reactionary, heir to her father, Vichy and the rest.
Voters from the mainstream right, who might have been tempted by her apparent recent conversion to the EU and sound money, will perhaps be thinking twice.
But looked at another way, maybe Marine Le Pen felt she had no choice but to back the letter. After all, no-one thinks there is any serious chance of a military coup, so she didn't think she could be accused of encouraging insurrection.
And the analysis of France's travails was identical to her own. If - in her view - the analysis is also one shared by a silent majority of the French, then she could hardly disown it.
France has proposed a controversial bill to tackle what President Emmanuel Macron has described as "Islamist separatism".
However, some critics in both France and abroad have accused the government of targeting Islam.