On its website, the State Administration for Industry and Commerce cited compatibility issues for the Windows OS and Office software.
It said about 100 officers raided Microsoft's offices in various cities across China to gather more information into the way Microsoft bundles its software and adds security features. The statement said the authorities had made copies of the company's financial statements and contracts and seized computers and electronic data files that contain internal communications.
The inspectors are investigating a vice president as well as other senior management, including in marketing and finance, as well as other personnel in China. The government said some of the employees in question have been out of contact, and it is urging Microsoft to cooperate with the authorities.
Microsoft could not be immediately reached for comment. However, the company issued a statement Monday, confirming the official visits and said it was "happy to answer the government's questions."
Microsoft is the latest American tech firm to face scrutiny from Beijing after Washington's repeated accusations of Chinese cybertheft.
The announcement comes one day before Microsoft holds an Xbox One product launch in Shanghai.
—By CNBC's Eunice Yoon. Additional Reporting by Bo Gu, Wendy Min.