2 January 2015
Last updated at 12:38 ET
She claims that between 1999 and 2002 she was forced by Epstein to have sex with the prince when she was a minor.
The palace said it would not comment in detail on the legal proceedings.
But a Buckingham Palace spokeswoman said: "This relates to long-standing and ongoing civil proceedings in the United States, to which the Duke of York is not a party.
"As such we would not comment on the detail. However, for the avoidance of doubt, any suggestion of impropriety with underage minors is categorically untrue".
Analysis By Peter Hunt, BBC royal correspondent
This is a long-running, complicated legal action which began in 2011 against an American businessman called Jeffrey Epstein who has served 18 months in prison for soliciting a minor for prostitution. Back in 2011 Prince Andrew had to apologise for his friendship with Jeffrey Epstein.
In these court documents, for the first time, an unnamed woman alleges she was forced to have sexual relations with Prince Andrew when she was a minor, three times in three different locations.
He is paying a heavy price for his friendship with Jeffrey Epstein which he acknowledged at the time was a mistake on his part.
It is interesting Buckingham Palace issued this statement in the first place because in the past the Palace would not have commented on such things, they would just hope they'd go away.
Given that it was on the Politico website, it was on other national newspaper websites, I think they felt they had no choice but to make it very clear that this denial was "absolute, total and emphatic", as one of the people close to him said to me.
'Financial gain' The woman says she was forced to have sexual relations with the prince in London, New York and on a private Caribbean island owned by Epstein.
The accusation is contained in a motion filed in a Florida court this week, which is part of a lawsuit over how federal prosecutors handled the case of Epstein.
The court document, first reported on by Politico Magazine, alleges: "Epstein also sexually trafficked the then-minor Jane Doe (a name used in US legal proceedings for people with anonymity), making her available for sex to politically connected and financially powerful people.
"Epstein's purposes in 'lending' Jane Doe (along with other young girls) to such powerful people were to ingratiate himself with them for business, personal, political, and financial gain, as well as to obtain potential blackmail information."
Prince's life
The prince has previously been criticised for his former friendship with Epstein, who was convicted of sex offences in 2008.
The pair were photographed meeting in December 2010, after the tycoon had served an 18-month prison sentence for soliciting a minor for prostitution, and the prince had also visited Epstein at his Florida home over the years.
The prince stepped down as the UK special representative for trade and investment in July 2011 after 10 years in the role.
by Emily Straton and Biodun Iginla, BBC Newsbeat Online
Buckingham
Palace has denied "any suggestion of impropriety with underage minors"
by Prince Andrew, after he was named in US court papers.
A woman named him in documents she filed in a Florida court
over how prosecutors handled a case against financier Jeffrey Epstein.She claims that between 1999 and 2002 she was forced by Epstein to have sex with the prince when she was a minor.
The palace said it would not comment in detail on the legal proceedings.
But a Buckingham Palace spokeswoman said: "This relates to long-standing and ongoing civil proceedings in the United States, to which the Duke of York is not a party.
"As such we would not comment on the detail. However, for the avoidance of doubt, any suggestion of impropriety with underage minors is categorically untrue".
Analysis By Peter Hunt, BBC royal correspondent
This is a long-running, complicated legal action which began in 2011 against an American businessman called Jeffrey Epstein who has served 18 months in prison for soliciting a minor for prostitution. Back in 2011 Prince Andrew had to apologise for his friendship with Jeffrey Epstein.
In these court documents, for the first time, an unnamed woman alleges she was forced to have sexual relations with Prince Andrew when she was a minor, three times in three different locations.
He is paying a heavy price for his friendship with Jeffrey Epstein which he acknowledged at the time was a mistake on his part.
It is interesting Buckingham Palace issued this statement in the first place because in the past the Palace would not have commented on such things, they would just hope they'd go away.
Given that it was on the Politico website, it was on other national newspaper websites, I think they felt they had no choice but to make it very clear that this denial was "absolute, total and emphatic", as one of the people close to him said to me.
'Financial gain' The woman says she was forced to have sexual relations with the prince in London, New York and on a private Caribbean island owned by Epstein.
The accusation is contained in a motion filed in a Florida court this week, which is part of a lawsuit over how federal prosecutors handled the case of Epstein.
The court document, first reported on by Politico Magazine, alleges: "Epstein also sexually trafficked the then-minor Jane Doe (a name used in US legal proceedings for people with anonymity), making her available for sex to politically connected and financially powerful people.
"Epstein's purposes in 'lending' Jane Doe (along with other young girls) to such powerful people were to ingratiate himself with them for business, personal, political, and financial gain, as well as to obtain potential blackmail information."
Prince's life
- Andrew Albert Edward Christian, born Buckingham Palace, 19 February 1960, the third child of the Queen and Duke of Edinburgh
- Educated by a governess, then at Heatherdown Prep School, Surrey, and Gordonstoun in Scotland
- Joined Royal Navy and trained as a helicopter pilot
- Served in the 1982 Falklands conflict
- Married Sarah Ferguson in 1986, and had two daughters, Beatrice and Eugenie. Divorced in 1996
- Retired from navy and became UK trade envoy in 2001
- Stepped down from the role in 2011 following controversy over his friendship with convicted sex offender Jeffrey Epstein
The prince has previously been criticised for his former friendship with Epstein, who was convicted of sex offences in 2008.
The pair were photographed meeting in December 2010, after the tycoon had served an 18-month prison sentence for soliciting a minor for prostitution, and the prince had also visited Epstein at his Florida home over the years.
The prince stepped down as the UK special representative for trade and investment in July 2011 after 10 years in the role.
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