The ex-President Nicolas Sarkozy has been detained for questioning over alleged influence peddling.
Mr Sarkozy is being held at Nanterre, near Paris, in an unprecedented step against a former president.
Mr Sarkozy is being questioned about whether he sought inside information from a judge concerning an investigation into campaign funding.
The latest developments are seen as a blow to Mr Sarkozy's attempts to challenge for the presidency in 2017.
Sarkozy And France's Investigators
This thought to be the first time a French former head of state has been held in police custody.
His predecessor, Jacques Chirac, was given a suspended prison sentence in 2011 for embezzlement and breach of trust while he was mayor of Paris.
Investigators will be able to hold Mr Sarkozy for an initial period of 24 hours but can extend custody for another day.
Government spokesman Stephane Le Foll denied any political pressure had been placed on the judicial system to prosecute Mr Sarkozy.
"The justice system is investigating and will follow this through to the end. Nicolas Sarkozy can face justice just like anyone else," Mr Le Foll said.
Mr Sarkozy's allies rallied to support him.
Mayor of Nice, Christian Estrosi, tweeted: "Never has any former president been the victim of such treatment, such an outburst of hatred."
Diaries
An investigation was launched in February into whether Mr Sarkozy had sought inside information about the inquiry into his 2007 election campaign funding.
It has been claimed that late Libyan leader Muammar Gaddafi helped fund the campaign.
It is alleged that Mr Sarkozy was kept informed of proceedings against him while a decision was made over whether his work diaries - seized as part of the funding inquiry - should be kept in the hands of the justice system.
The Court of Cassation ruled in March 2014 that the diaries should not be returned.
Investigators believe the former president was tipped off that his phone was being bugged as part of the inquiry.
Mr Sarkozy insists the allegations against him are politically motivated.
But the BBC's Hugh Schofield in Paris says it is clear they represent another obstacle in the way of his planned return to frontline French politics.
The former president is seeking to regain the leadership of the centre-right UMP party later this year.
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