The arrest of Charles Lieber, the chairman of Harvard's chemistry and chemical biology department, is the latest development in a long-running saga over suspected intellectual property theft.
US sleuths are investigating hundreds of cases of alleged theft by Chinese scientists working in or visiting the United States.
Two other scientists, both Chinese nationals, were also charged Tuesday, the Department of Justice said in a statement.
One is a Boston University science student who prosecutors say failed to inform US immigration that she was a member of China's armed forces, the People's Liberation Army.
The other is a cancer researcher who is accused of trying to smuggle vials containing biological research out of the US in his socks.
Lieber's arrest is unusual because he is not of Chinese descent and is a prominent figure at one of the world's most respected universities.
Prosecutors allege that Lieber was paid $50,000 a month and received more than $1.5 million to set up a lab at Wuhan University of Technology.
They say he lied to investigators about his affiliation with Wuhan University and his involvement in the Chinese government's Thousand Talents Plan.
The program seeks to recruit international experts in scientific research, innovation and entrepreneurship.
The US government has described it as a threat to national security, however.
"This is a small sample of China's ongoing campaign to siphon off American know-how and technology for China's gain," Massachusetts prosecutor Andrew Lelling told reporters.
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