The British & Irish Lions Test No.9 against Australia last summer, will be on the bench for a match Wales must win to keep alive their title hopes.
Phillips makes way for Rhys Webb, who makes his full Test debut, following the 26-3 defeat by Ireland 11 days ago. George North moves from wing to outside centre, Liam Williams wears the No.11 shirt and the fit-again Luke Charteris replaces Andrew Coombs at lock.
"We just felt the team needed a change," Gatland said. "We weren't happy with Mike's performance against Ireland and just felt it was an opportunity for Rhys. We released Rhys back to the Ospreys last weekend for some game time and I thought he played well. It is a great opportunity for him.
"[Phillips] probably got a little bit confrontational in a one-on-one with Conor Murray [the Ireland scrum-half] and he was yellow-carded as well towards the end of the game.
"It is probably an opportunity for him to reflect on his performance. That is why we have put him on the bench and given Rhys a chance.
"Mike has probably been our first- choice for a long time and it is important we give someone else an opportunity to stake a claim and give us some depth in that role as well. Mike always responds well to a challenge and if he gets a chance on Friday night we are expecting him to be composed and calm and play what is in front of him.
"Competitiveness is probably one of his attributes - and it is probably a weakness as well."
Reflecting on the match in Dublin aftermath, Gatland, the Wales head coach, said: "We have had some really honest discussions with a few other players in terms of there being a chance of putting the disappointment from Ireland behind us and for some of those players to redeem themselves. We are well aware that in the last game a few guys were short of matches, and as a forward pack, we just didn't front up. They will hopefully make amends for that on Friday night."
WALES (v France, Millennium Stadium, Friday, 8pm)
L Halfpenny (Cardiff Blues); A Cuthbert (Cardiff Blues), G North (Northampton), J Roberts (Racing Metro), L Williams (Scarlets); R Priestland (Scarlets), R Webb (Ospreys); G Jenkins (Cardiff Blues), R Hibbard (Ospreys), A Jones (Ospreys), L Charteris (Perpignan), A-W Jones (Ospreys), D Lydiate (Racing Metro), S Warburton (Cardiff Blues, capt), T Faletau (Newport Gwent Dragons).
Replacements: K Owens (Scarlets), P James (Bath), R Jones (Scarlets), J Ball (Scarlets), J Tipuric (Ospreys), M Phillips (Racing Metro), D Biggar (Ospreys), J Hook (Perpignan)