Li Jianzhong, a key figure in China's successful space programme, has been arrested on bribery charges, state news agency Xinhua has reported.
Li Jianzhong was influential in the 2003 Shenzhou V mission
Mr Li, former head of China's launch vehicle maker CALT, is alleged to have taken more than $200,000 in bribes and to have embezzled nearly $19m.
CALT builds China's Long March rockets, one of which powered the manned Shenzhou V craft into space in 2003.
Investigations into Mr Li started soon after that launch, Xinhua said.
Mr Li is said to have taken the bribes during his time as president of the China Academy of Launch Vehicle Technology (CALT), between 1994 and 2000.
He won plaudits for his contribution to the Long March rockets, which have sent various satellites and the Shenzhou V - China's first manned spaceship - into orbit.
China's space programme is one if its most prestigious projects, and the charges against Mr Li will be seen as a setback for the project's standing.
The next manned space mission, Shenzhou VI, is due to take place later this year, and aims to launch two Chinese astronauts into space for a seven-day period.
"Li's case will not erode the courageous, collective spirit of the Shenzhou VI team," Xinhua quoted a senior researcher as saying.