Asked by CNN Chief National Correspondent John King if he had any doubts about Obama's Christian faith, Graham, who has made controversial comments about Islam in the past, said the president's background is fueling the false perception that he is a Muslim.
"I think the president's problem is that he was born a Muslim, his father was a Muslim. The seed of Islam is passed through the father like the seed of Judaism is passed through the mother. He was born a Muslim, his father gave him an Islamic name," Graham said on CNN's "John King, USA."
"Now it's obvious that the president has renounced the prophet Mohammed and he has renounced Islam and he has accepted Jesus Christ. That is what he says he has done, I cannot say that he hasn't. So I just have to believe that the president is what he has said," Graham continued.
Earlier this year, the Army rescinded its invitation to Graham for the National Day of Prayer at the Pentagon over controversial remarks he made about Islam.
"True Islam cannot be practiced in this country," he told CNN last December. "You can't beat your wife. You cannot murder your children if you think they've committed adultery or something like that, which they do practice in these other countries."
Graham later tried to temper his remarks by saying that he had Muslim friends. However, Graham has a history of comments that bothered the Pentagon. Shortly after the terrorist attacks of September 11, 2001, Graham called Islam a "very evil and wicked religion."
A new poll released Thursday conducted by the Pew Forum on Religion and Public Life found that nearly one in five Americans falsely believe Obama is a Muslim, up from around one in 10 Americans who said last year they believed he was Muslim.
While most of those who think Obama is Muslim are Republicans, the number of independents who believe he is Muslim has expanded significantly, from 10 percent last year to 18 percent now, according to the Pew survey.
The White House stated unequivocally on Thursday that Obama is a Christian.
"President Obama is a committed Christian, and his faith is an important part of his daily life," Deputy White House Communications Director Jen Psaki told CNN. "He prays every day, he seeks a small circle of Christian pastors to give him spiritual advice and counseling, he even receives a daily devotional that he uses each morning. The president's Christian faith is a part of who he is, but not a part of what the public or the media is focused on every day."
In April, President Obama prayed with the Rev. Billy Graham and his son Franklin at Graham's mountaintop home in North Carolina. Billy Graham, a major figure in the American evangelical movement, has advised presidents dating back to Harry Truman.