The fur coat was spotted as she greeted her granddaughter-in-law, Kate Middleton, at her country estate in Sandringham for the royal family's festive celebrations.
"The Queen should not be wearing fur - it's as simple as that. This is 2013 and no right-thinking person would wear fur," Andrew Tyler, director of Animal Aid charity, told the 'Daily Mirror'.
"Fur is now unfashionable amongst right minded people. People know how cruel it is to get fur. It's cruel and uncivilised," he added.
The charity People for the Ethical Treatment of Animals (PETA), which is known to splash colour on fur coats as a protest against its unethical association with animal cruelty, had launched a campaign this Christmas to give homeless people unwanted fur coats.
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"We donate any coats that we don't cover in fake blood for a demonstration to homeless people who can't afford to buy their own coats - after all, the homeless are the only people who have any excuse for wearing fur.
"Animals are routinely strangled, electrocuted and skinned alive for their pelts. Fur farming was banned in 2000 because it's a cruel industry that no longer represents British values. We truly hope that the Queen gets with these more enlightened times and chooses to wear something more humane in the future," he added.
The Queen had changed out of the court by the time she attended the traditional Christmas Day church service in the east England country of Norfolk.
Prince William and Kate are expected to travel to Berkshire so that Prince George can spend time with his other grandparents.