The trio has sponsored a prize as part of the 2018 Biodesign Challenge. To win the PETA Prize for Animal-Free Wool, students have to develop an innovative, sustainable, bio-fabricated animal-free wool.
The Biodesign Challenge Summit will take place in New York City on June 21-22 - students from around the world will take part.
The winners students will get to learn from Stella McCartney, spending up to two weeks at her UK headquarters.
The international competition is part of a drive to encourage designers to 'reshape' the fashion industry, creating more sustainable designs.
Stella McCartney said: "We're so excited for everything that's happening in biotechnology and everything that's unlocking in fashion and how modern it is.
"We're so, so thrilled to find out what you guys are going to come up with."
McCartney added that they want entrants to 'develop a proof concept that works from A-Z', saying it has to be useable in fashion design.
The designer is excited by changes in modern fabrics
According to PETA, creating a new vegan alternative is not just about animal rights, it's part of a wider environmental issue - and reducing the impact animal agriculture has on the planet.
The charity cites a number of innovative designers who have created alternative fabrics from materials including cork, apples, and pineapples.
PETA says: "We're looking to you - we can't wait to see what you create."