Gov. Jan Brewer's order to prevent undocumented workers from getting a license goes against current state practice, immigration attorneys contend in a report by The Arizona Republic.
Arizona allows illegal immigrants to have state driver's licenses if they have received some form of deferred action on their status, such as being given work permits.
Obama recently signed an executive order giving a two-year deferment from deportation to young illegal immigrants brought in as minors. As many as 80,000 people in Arizona could be eligible for the permits.
Brewer's order, issued Wednesday, immediately raised criticism from groups advocating for illegal immigrants.
"It's pretty clear that as long as you have deferred action and you do have a work permit, then you are eligible to receive a driver's license," said Alessandra Soler, executive director of the American Civil Liberties Union of Arizona.
The governor's action "is contrary to state law," said Regina Jefferies, chair of the Arizona Immigration Lawyers Association.
The question to be resolved is whether legal presence or legal status is established by deferred action, said Ann Morse, program director of the Immigration Policy Project at the National Conference of State Legislatures.