Work has stopped on a building project after police received a complaint that a rare butterfly breeding ground had been disturbed.
The marsh fritillary butterfly is a protected species
Conservationists fear the work, at an old bus depot, could have destroyed a marsh fritillary breeding ground.
Officers are examining whether the Wildlife and Countryside Act, which protects rare species, has been contravened in Ystradgynlais, Powys.
Experts said the marsh fritillary had almost disappeared in the county.
Dyfed-Powys Police said they had asked a builder to stop work temporarily until they made sure no offences had been committed.
Russell Hobson, senior officer with the Butterfly Conservation Trust, said the Ystradgynlais site was a core breeding area for the marsh fritillary. Brecknock Wildlife Trust has also expressed its concern.
The species is in decline in most European countries. It is also found in Asia as far east as Korea.