The legal action in New York by former "Apprentice" contestant Summer Zervos — who claims Trump groped her in a Beverly Hills, California, hotel room in 2007 — came three days before Trump is scheduled to be inaugurated as president.
Zervos, who is represented by high-profile plaintiff lawyer and Trump antagonist Gloria Allred, first went public with her allegations against Trump last October after an audio-tape emerged of him bragging to then-"Access Hollywood" reporter Billy Bush about being sexually aggressive toward women.
In response, Trump denied Zervos' claims, said she and other women who made similar allegations against him were "liars" and threatened to sue them.
In November, Zervos called on Trump to retract his threat and his claim that she was lying.
Trump has not retracted either since then.
"More of the same from Gloria Allred. There is no truth to this absurd story," said Hope Hicks, spokeswoman for Trump.
"He has left me with no alternative other than to sue him and vindicate my reputation," Zervos said Tuesday, while sitting next to Allred at a press conference in Los Angeles.
The suit claims defamation and infliction of emotional distress by Trump, but does not seek damages for the alleged sexual assault. Allred said Zervos has taken and passed a polygraph test that questioned her about her allegation of sexual assault.
Allred on Tuesday called Trump a "sexual predator."
Zervos and Allred said they were willing to dismiss the suit against Trump if he retracted his claims about her and admitted the truth of her allegations about sexual misconduct by him.
Allred said she expected Trump's attorneys to "fight this with everything they have."
"We're ready," Allred said.
The lawyer also said she might seek, via legal subpoena, video outtakes of Trump on the NBC show "The Apprentice."
Allred noted that the United States Supreme Court had previously ruled that a civil lawsuit could proceed against a sitting president.
That case, involving President Bill Clinton and Paula Jones, a woman he allegedly sexually harassed while serving as governor of Arkansas, ultimately led to Clinton's impeachment for lying under oath by denying he had sex with White House intern Monica Lewinsky.