The entire European country of Luxembourg including its capital of the same name scrapped fares in 2020, after Estonia's capital Tallinn introduced the policy in 2013.
From Thursday evening, Montpellier residents with a special pass were able to ride trams and buses free of charge in the southern city.
Visitors and tourists will still have to pay 1.60 euro ($1.70) a trip.
Michael Delafosse, the Socialist mayor of the city of some 500,000 people, promised free public transport when he was elected in 2020.
He started by introducing free rides at the weekend that year, then the following year extended them to all those younger than 18 or older than 65 throughout the whole week.
Delafosse said the initiative was part of a "European commitment to... the climate and purchasing power".
"We have set up an association to help other European mayors make the same choice," he said.
Audrey Benezech, a 46-year-old travel agency manager, was impressed.
"This could encourage people to use their cars less, especially with the price of petrol at the moment," she said.
Before the initiative to make public transport free in Montpellier, just 86,000 people had paid subscriptions to use it, according to figures obtained by AFP.
But that figure has tripled to 260,000 subscribers in recent days running up to the launch of the free pass, either in card or smartphone app form.
The city has said a new transport tax on companies with more than 11 employees will help fund the free transport initiative.
Last year city residents accounted for 90 percent of the 39 million euros in public transport ticket sales.
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