China's health ministry said on Tuesday it had ordered food safety authorities in central Hubei province to investigate claims that milk powder has caused infant girls to grow breasts.
Officials had already begun tests on the baby formula after parents and doctors expressed fears that hormones in the milk powder made by NASDAQ-listed Synutra had caused babies to develop breasts prematurely.
"The ministry of health had attached great importance to this issue," spokesman, Mr Deng Haihua, told a news conference, according to a transcript.
Local food safety authorities had earlier refused a parent's request to investigate the formula made by Synutra, based in the eastern city of Qingdao, saying they did not conduct tests at consumers' behest, state media reported.
Medical tests indicated the levels of hormones in three girls, ranging in age from four- to 15-months and who were fed the same baby formula, exceeded those of the average adult woman, China Daily reported on Monday.
A fourth case was reported in Beijing, Xinhua reported on Tuesday.
The ministry said medical experts were also assisting a separate medical investigation into the cause of the infants' condition.
Synutra insisted in a statement that its products were safe and that no man-made hormones or illegal substances had been added during production.
The company's shares plunged 27 per cent on Monday in New York to $12.72, their steepest fall since China's 2008 tainted milk scandal.
Chinese dairy products were recalled worldwide in 2008 after it was found that melamine, which is used to make plastics, was widely and illegally added to the products to give the appearance of higher protein.
Melamine was found in the products of 22 Chinese dairy companies in a massive scandal blamed for the deaths of at least six infants and for sickening 300,000 others in China.