"This has caused great concern in our community," Tarafa Baghajati of the Islamic Community in Austria (IGGiÖ) said.
He said it was obviously not a "prank" and had been done by people who meant business.
Some residents of the low income area in Floridsdorf believed that Muslims had pasted over the signs themselves but local Imam Salim Mujkanovic is convinced "that this is deliberate provocation by somebody who wants to bring the mosque into disrepute."
Baghajati suspects right-wingers are to blame, and are using the fact that jihadists are being recruited by Isis and other terrorist groups in Austria to stir up fear and animosity.
However, he said he was pleased that there had been "numerous expressions of solidarity" for the Muslim community since it became aware of the incident.
Police have confirmed that street signs were changed - one sign had the words ‘James Foley - beheaded’ pasted over it.
The case has been handed over to the State Office for the Protection of the Constitution. The signs have since been cleaned and returned to normal.
A letter condemning attacks on Muslims in Austria signed by a thousand people from different faiths was published on the internet on Wednesday.
Three women who were wearing headscarves, three mosques and a religious high school under construction have all been attacked in the last month.
The declaration was prepared under the leadership of Muslim feminist Dudu Kucukgol and Peter Stoger, a professor at the University of Innsbruck entitled, "Call for public calm" and "Open letter on the hysteria against Muslims."
It called for "prudence and objectivity in this atmosphere of fear mongering."
They feel that the debate in the media and in politics has caused the exclusion of Muslims, the declaration states.
"Creating fear against a religious group harms all people. We call for calm for the peace of all Austrian people" the declaration said.
The declaration was signed by academics, writers, members of parliament, journalists and members of non-governmental organizations.