New York City officials say they could shut a bus service running through an Orthodox Jewish area that is accused of asking women to sit at the back.
Officials have written to the firm operating the bus asking what they are doing to prevent discrimination.
The B110 bus is operated by a private firm under a franchising agreement with the city, but is open to the public.
A student journalist published a story this week reporting that a woman on the bus was asked to sit at the back.
The New York Times later reported that a woman passenger on the B110 had said men and women also sat apart on similar bus services catering for the city's Hasidic Jewish community.
New York City's Department of Transportation director, Anne Koenig, has asked the company that operates the B110 to respond to the claims.
"Please be advised that a practice of requiring women to ride in the back... would constitute a direct violation of your franchise agreement and may lead to termination of that agreement," she wrote, reports Reuters news agency.
The department said the firm that runs the service had no exemptions from city's anti-discrimination standards.
Officials said the public bus has been franchised since 1973 to the Private Transportation Corporation, which has not yet commented.
Mayor Mike Bloomberg told reporters on Wednesday that segregating men and women was "obviously not permitted" on public buses.