Haley Clauson, who was 15 at the time of the 2010 photo shoot in Los Angeles, says the company destroyed her reputation by using an image of her posed on a motorcycle with her legs open and without a bra.
Clauson's family filed the lawsuit against Urban Outfitters in a Manhattan courthouse on Thursday and is asking for $28 million in damages.
The lawsuit claims that the photographer, Jason lee Parry, agreed not to release the photos, but still sold them to several outlets, including Urban Outfitters.
The photos, the lawsuit says, violate laws that forbid portraying a child in a "sexually suggestive manner."
Other photographs in the series also include the model with a beer and riding the motorcycle without a helmet.
Clauson, now 16, has worked for designers including Gucci, Donna Karan and Oscar de la Renta.