Mr Gul's office said the president could not stand trial except for treason
A Turkish court has ruled President Abdullah Gul should stand trial for alleged embezzlement in the late 1990s.
The Welfare Party, a precursor of the governing AK Party, was accused of misappropriating funds from the state treasury after being banned in 1998.
Mr Gul, a founder of the AKP, was elected president in 2007.
The case will now be considered by an appeal court. But it is unclear whether Mr Gul will end up going on trial, as he could have immunity as president.
Correspondents say Turkey's secular establishment has often used the courts to oppose the activities of the Islamist-rooted AKP.
Last July, the Constitutional Court came close to banning the party for allegedly trying to undermine the country's secular system.
The Welfare Party briefly held power as part of a coalition government between 1996 and 1997, during which time it implemented some pro-Islamist reforms, such as allowing women to wear headscarves in government offices.
Its leader, Prime Minister Necmettin Erbakan, was eased from office following pressure from the military in a so-called "soft coup". In 1998, the party was banned for violating constitutional obligations to respect secularism.
Afterwards, the Welfare Party's assets were transferred to the state treasury, which found that more than 1bn lira ($3.5m at the time) was missing.
The party said it had transferred the money to its local branches, while prosecutors argued that the money had never reached the branches but did not say where it went.
In 2002, Mr Erbakan was sentenced to two years and four months in jail for embezzlement in connection with the alleged fraud, and fined.
Mr Gul, who was deputy chairman of the Welfare Party and a state minister under Mr Erbakan, pardoned him last year.
In Monday's ruling, the court said it was "the rule in the Turkish Republic's constitution and laws that everyone should stand trial".
However, Mr Gul's office said that according to the constitution, "the president cannot be put on trial unless it is on charges of treason".