Guatemalan authorities are trying to check the status of 46 young children to see if they were taken from their parents for illegal adoption abroad.
US couples adopted more than 4,000 Guatemalan children last year
They were found at a home close to Guatemala City after neighbours reported seeing foreigners collecting children there every day.
The children's ages range from three years old to just a few days.
Officials say they are waiting for the home's owner, said to be a US citizen, to return to Guatemala on Monday.
Last year, couples in the US adopted more than 4,000 infants from Guatemala, second only to China.
The Guatemalan attorney general's office has said there is so far no evidence that the children have been stolen or their parents coerced into giving them up.
However, officials said that few of the children had the necessary paperwork to be in the custody of anyone other than their parents, and the house did not have permission to operate as an adoption centre.
Two lawyers who reportedly processed the adoptions were detained during the police raid on the home, which is located in the tourist town of Antigua.
The authorities say they are awaiting the expected return of the home's owner from the US later on Monday.
The children have remained at the home, and are being looked after by officials from the attorney general's office.
Katherine, a US citizen from Michigan who is in the process of adopting twin boys from the home in question, told the BBC News website she was confident it is being properly run.
She visited the home with her husband in May and was impressed by the quality of care offered by the staff there, particularly for children with medical problems.
She believes the government probe has been ordered for political reasons ahead of the presidential elections due to take place next month.
While the adoption process in Guatemala is not perfect, she says, most of what they have read in news reports about this orphanage since the raid "goes against what we have known or seen".
"It is very difficult, the uncertainty and not knowing what is going to happen next to the children - our kids," she added.
Earlier this year, the Guatemalan Congress ratified The Hague Convention on Inter-country Adoptions which sets out a series of measures guaranteeing greater transparency in the process of adoption.
However, the US state department is advising against the practice because of reports that many Guatemalan mothers face pressure to sell their children into adoption.
Last week, the US embassy in Guatemala tightened up the visa regulations for couples trying to adopt there.
Guatemala-based journalist Martin Asturias told the BBC that adoption had become big business in the country.
Prices range from about $25,000 (£12,500) up to about $60,000 (£30,000) depending on how complicated the process was and how specific the adoptive parents were in their demands, he said.
The business of adoption has also had a wider effect, Mr Asturias says.
"Guatemala has fallen into what I would say is a 'social psychosis'.
"Rumours can spread, especially in small Mayan villages or towns, that children are being stolen to be sold as adopted children."
The anxiety and anger caused by such rumours have in the past led to people believed to be involved in the adoption business being lynched or stoned, said Mr Asturias.