The party's anti-corruption agency said in a brief statement on its website late Tuesday that Lu Wei, 57, was being investigated for suspected "severe disciplinary violations".
Lu, who had stepped down from his post last year, was once named among the world's 100 most influential people by Time magazine and had rubbed shoulders with the likes of Facebook co-founder Mark Zuckerberg.
He had fiercely defended the country's censorship apparatus after he was appointed in 2013 to supervise controls on online expression as head of the Cyberspace Administration of China.
He is the most prominent figure to fall from grace since President Xi Jinping was given a second five-year term in office at a Communist Party congress last month.
Xi launched a major campaign against corruption when he took office in 2012 that has brought down 1.5 million officials since then.
At the congress that consolidated his power in October, Xi vowed no let up to the campaign against corruption, which he called the "greatest threat" to the party.
Lu was a powerful figure both at home and abroad, where he commanded the attention of global technology firms eager for a piece of the Chinese market.
He was personally received by Zuckerberg in 2014 at Facebook's Silicon Valley headquarters, and appeared in the front row of a group photo alongside top executives from American tech giants such as Amazon and Xi when the president visited the US in 2015.
Authorities closely monitor what people say, see or share online, and block any content they deem illegal or politically sensitive.
Chinese nationals can face fines or even jail time for unfavourable social media posts.
Under Lu's watch, cyberspace regulations grew stricter with the passage of new online "security" regulations as part of a sweeping package of laws aimed at tightening state control over a wide range of domains.
While "the Chinese government has indeed expanded its power to control prominent problems online", Lu said in 2015, it has used its capabilities to control crime, pornography, and "rumours" -- a euphemism that can be applied to everything from misinformation to political speech.
Authorities have further tightened internet controls in recent months, shutting down celebrity gossip blogs and probing platforms for "obscenity".
Lu's investigation comes as China prepares to host its fourth World Internet Conference next month to promote its views about web policy, though the annual event has been criticised by rights groups.