Detectives seized more than Sh1.5 billion in fake US dollars when they raided a house in Pangani, Nairobi County, on Tuesday.
The Directorate of Criminal Investigations (DCI) said the fake notes were found in a room at Eden House Flats, Pangani Shopping Centre.
They arrested a suspect identified as 29 year-old Yassin Ahmed Osman.
"Detectives stormed the house and conducted a search upon which a black bag containing the fake currency notes was found and confiscated," the DCI said.
"The suspect was placed in custody pending arraignment."
The DCI said officers from Starehe were pursuing others involved in the crime.