Michael Howard's grandfather might have entered Britain as an illegal immigrant in the 1930s, the Tory leader has said.
Mr Howard's father fled from Romania to south Wales in 1939
Mr Howard told the Daily Mail his father, Bernard Hecht, had falsified details about his own parents when applying for British citizenship.
He said his father had said they had died in Romania, when Mr Howard's grandfather had been living in London.
Mr Howard said the fact his father had lied might have meant his grandfather had entered the country illegally.
Mr Howard's grandmother died at Auschwitz in 1944.
"I have speculated on the reason and I suppose one possibility is my grandfather might have entered Britain unlawfully," he told the newspaper.
"There might have been some irregularities about his status."
Last month, Mr Howard unveiled proposals that would see immigration levels capped under a Tory government, with a points system for applicants seeking visas to work in Britain.
It would also see quotas on asylum, with all claims processed overseas.
Mr Howard admitted he was not sure if his grandfather would have been allowed into the country under his party's proposals.
"I cannot answer that. We have not yet worked out how the points system will operate."
Mr Howard announces caps on immigration and asylum last month
Mr Howard's father came to Britain, as an economic migrant, at a time when fascism was on the rise in Europe.
Having changed the family's name after settling in Wales, he applied for British citizenship in 1947.
Mr Howard said he had discovered his family background only recently.
"It came as a surprise to me. What my father did was wrong," he said.
"I don't condone it - but I don't feel embarrassed, because I have done nothing wrong myself."
Mr Howard made the revelation after the recent 60th anniversary of the liberation of Auschwitz, and after learning that journalist Michael Crick was investigating his family history, the paper said.
Mr Crick told BBC Radio 4's Today programme family members remembered Mr Howard's grandfather living in London up until the early 1950s.