Police questioned one of Israel's top religious officials, Chief Rabbi Yona Metzger, on Thursday on suspicion of bribery, fraud and money laundering, a police spokesman said.
Spokesman Micky Rosenfeld gave no details about the allegations against Metzger and three other suspects but said the questioning had followed an undercover investigation.
A spokesman for Metzger had no comment on the matter.
Metzger is one of two state-appointed chief rabbis who oversee official religious policy and conduct state ceremonies. He has also been one of the Jewish state's main interlocutors with the pope.
Metzger represents Ashkenazi Jews whose ancestry originates in eastern Europe but he and Chief Rabbi Shlomo Amar, who represents Jews of Middle Eastern origin, hold relatively little sway over ultra-Orthodox Jews who answer to their own rabbis.
The 10-year term of both chief rabbis is set to end next month when elections for successors are due to be held.
Metzger is the latest in a line of Israeli officials to face criminal allegations.
Avigdor Lieberman, who quit as foreign minister last year but remains a member of parliament, is currently on trial on charges of fraud and breach of trust.
Ehud Olmert stood down as Israeli prime minister in 2008 after being accused of corruption though he was later cleared of most of the charges against him.
Writing by Ori Lewis, editing by Gareth Jones