Nestle is cutting prices by as much as 20 percent.
Nestle's unit Wyeth Nutrition confirmed an investigation, which has been reported by state media, and pledged to "immediately" cut prices on some formula products.
"Wyeth Nutrition has always respected and been willing to abide by China's laws and regulations and is actively cooperating with the anti-monopoly investigation into the company," it said.
On Tuesday it was widely reported that China's National Development Reform Commission had launched a probe of foreign baby formula makers.
Companies under scrutiny include Nestle, Danone, Mead Johnson Nutrition, Abbott Laboratories and Dutch firm Royal FrieslandCampina which produces the Friso brand.
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