Transgender youth support charity Mermaids is the subject of a statutory inquiry, the Charity Commission says.
The regulatory body began investigating Mermaids in September, after reports about the supply of chest-binding devices to teenagers.
A formal inquiry has now been launched because of "newly identified issues" with Mermaids' governance and management, the Commission says.
Mermaids says it will co-operate "fully and openly" with the Commission.
Mermaids is the country's leading charity in services offering support around gender and identity to children and young people up to 25 years of age.
"The charity has an unwavering commitment to safeguarding which is, and always will be, our top priority," a statement on Mermaids' website said.
"We will continue to co-operate fully, openly and with complete transparency with the Charity Commission as its inquiry gets under way."
Mermaids said it was already prioritising acting on "a number of significant challenges" that had been highlighted by a report which the charity commissioned earlier this year, into its own "equity, diversity and inclusion".
"We know we must do better and we are absolutely committed to doing so," it said.
The Charity Commission said opening the inquiry does not mean it has found any wrongdoing.
The Commission, which regulates charities in England and Wales, started its investigation into Mermaids in September, when it received complaints following reports in the Telegraph about the charity supplying chest-binding devices to teenagers.
The NHS defines binding as "reducing the appearance of soft tissue by flattening your chest".
It can be used by transgender or non-binary people to help relieve the symptoms of gender dysphoria, which is a sense of unease because of a mismatch between biological sex and gender identity.
People who choose to bind their chest often use specifically-designed devices known as binders. Others may make their own using sports bras, compression clothing designed for use in the gym, or bandages and body tape.
There is little medical evidence of the risks or advantages of chest binding. An interim report into gender services for children in March raised concerns that some binding devices may be potentially harmful.
The Charity Commission said the inquiry, which opened on 28 November, will examine:
- The administration, governance and management of the charity by the trustees, including its leadership and culture
- Whether the trustees have complied with and fulfilled their duties and responsibilities as trustees under charity law
- Whether there has been any misconduct and/or mismanagement by the trustees
A report will be published of the inquiry's findings, once it is concluded.