As conflicting rulings by French authorities over Dieudonne M'Bala M'Bala's act sowed widespread confusion, riot police carrying shields blocked access to the Zenith theater in the western city of Nantes.
Thousands of stunned ticket-holders in the nearly sold-out show chanted and hissed.
The 47-year-old comedian has been convicted more than a half-dozen times for inciting racial hatred or anti-Semitism in shows in which the Holocaust has been derided. He also has popularized the "quenelle" hand gesture, which Valls has criticized as an "inverted Nazi salute.
Dieudonne, as he is known, denies that his act and the "quenelle" are anti-Semitic.
Tensions over Dieudonne have played out on national television for days as they reached all the way to the pinnacle of the state, raising sometimes uncomfortable questions about free expression and anti-Semitism in today's France.
The tug-of-war over Thursday's show involved a multitude of French authorities: the Council of State, the country's highest administrative body; the city of Nantes; a court in Nantes and Interior Minister Manuel Valls.
Valls wants Dieudonne, (pronounced DYEU-dun-ay), kept off all stages in France, denouncing what he calls the "mechanics of hate" relayed by the comic.
The city of Nantes had banned the comic's performance, but a Nantes court overturned that ban earlier Thursday. Valls then took the matter to the ultimate authority, the Council of State, asking for an unusual urgent decision.
"In the face of the mechanics of hate ... we need firmness and determination and great calm," the interior minister said.
Citing a risk to public safety, the Council banned the performance only two hours before the show was to begin.
Valls declared that France had been made stronger by the decision to keep Dieudonne off the stage in Nantes.
"(But) the combat against the nauseating words of this personage continues," Valls said on the iTele TV station. "Citizens should not go to these shows."
There was no immediate reaction from Dieudonne, who had arrived expecting to perform after winning the first court battle. However, his Facebook page advised fans to avoid confrontation and go home "singing the Marseillaise," the French national anthem.
His fans and police eventually dispersed without serious incidents after the show was cancelled.
Thursday's legal drama may be just the beginning of a longer battle.
The Nantes show was to kick off a national tour. At least eight of the nearly 30 French cities where the comic's tour is planned through June are known to have banned his performances. Dieudonne has said he will fight them one by one.
Well-known Nazi hunter Serge Klarsfeld said it would be "intolerable" for the comedian to be allowed to stage Thursday night's show, given what already is happening in France.
"We have a country in which anti-Semitism is freely accepted," he said in a statement.
Valls is the most popular minister in France's Socialist government, but his adamant stance against Dieudonne, while drawing praise from leading conservative rivals, has left some mystified. Fears have been expressed that any bans on the show could prove counterproductive or even illegal.
The comic was convicted last fall for using the word "Shoananas," a mash-up of the Hebrew word for Holocaust and the French word for pineapple. A song containing the word is seen as deriding Holocaust survivors and victims. Some fans hoping to see Thursday's show carried pineapples.
Last week, an investigation was opened after Dieudonne allegedly made an anti-Semitic slur toward a Jewish journalist on France-Inter radio.
"When I hear him (the journalist) talk, you see ... I say to myself, gas chambers ... a pity," Dieudonne said during a performance last month.
Michel Euler in Nantes contributed to this report.