Sources told Reuters news agency that special counsel Robert Mueller had empanelled a grand jury in Washington in connection with a meeting involving Donald Trump’s son, his son-in-law Jared Kushner and a Russian lawyer in June 2016.
That move could allow Mr Mueller more expansive powers to pursue evidence, including issuing subpoenas and compelling witnesses to testify.
Speaking at a rally in Huntington, West Virginia, after the news broke, the US President said he hoped for a “truly honest” outcome from the investigation and branded concerns about his election campaign’s links with Russia as “total fabrication” and a “hoax”.
He called on prosecutors to instead investigate former opponent Hilary Clinton’s “paid Russian speeches”.
Questions about his own campaign were “just an excuse for the greatest loss in the history of American politics”, Mr Trump said.
Alleged Russian interference in the election has been the subject of several investigations in the first six months of Donald Trump’s presidency, with US congressional panels also looking into the extent of any tampering.
Moscow has denied any involvement and Mr Trump has repeatedly denied any collusion by his campaign team, including denouncing the investigations as political witch hunts.
A grand jury is a group of normal citizens who, behind closed doors, consider evidence and potential criminal wrongdoing and decide on whether charges should be brought.
White House special counsel Ty Cobb said he was unaware that Mr Mueller had starting using a new grand jury in the Russia investigation.
He vowed full co-operation, and said the “White House favours anything that accelerates the conclusion of his work fairly”.
Mr Cobb added that “we have no reason to believe” Mr Trump is under investigation.
Earlier this week, the White House conceded that the President “weighed in” on a statement by his son over the meeting like “any father would”.
Mr Trump Jr said he met the lawyer Natalia Veselnitskaya in June 2016 hoping to obtain damaging information on Hillary Clinton, although in a statement he denied it was related to the presidential campaign.
The talks were also attended by Mr Kushner and Paul Manafort, the Trump campaign chief at the time.
Mr Trump Jr, Mr Kushner and Mr Manafort were all called to appear before the US Senate as part of the investigation.
It is unclear if they would be the compelled to testify in front of the grand jury.