Mayor Tony Mack, emerging later in the morning from his home, denied having corrupted his office.
"We have not violated the public trust nor have I violated any of my public duties, and that's all I have to say on the matter," he said.
The FBI declined to provide any details on its investigation.
Mack's administration has been in turmoil from Day 1, staggering from one crisis to another. A housecleaning of staff at City Hall opened the door for Mack's own appointees, who quickly turned it into a revolving door. Some left over questions about their credentials, others to face criminal charges.
Under an agreement reached last year, the Democrat can hire department heads only from a pool of applicants the state offers or he risks losing $6 million in state aid.
Two years after winning office, questions have also lingered about how Mack financed his campaign at a time of personal financial problems. His home and other properties have faced foreclosure.
One of his early backers was businessman Joseph Giorgianni, who went to prison in the 1980s on charges of carnally abusing and debauching the morals of a 14-year-old girl in the back of his sandwich shop. The case gained notoriety because of weight-related health problems that got Giorgianni, a steakhouse owner who once claimed to tip the scale at over 500 pounds, released and led a prosecutor to charge he "ate his way out of jail."
Tax records showed Giorgianni's home was one of the other addresses searched by the FBI, along with the home of the mayor's brother, Ralphiel Mack, a high school football coach.
Phone messages left for both on Wednesday were not returned.
Giorgianni donated thousands of dollars to Tony Mack's campaign and was on hand in March for his annual State of the City address. The mayor, criticized for his association with Giorgianni, told The Times newspaper in 2010 that Giorgianni was "a decent person that made a mistake."
Mack lent $20,000 to his campaign when his home was in foreclosure. In an interview with The Times, he denied any of the money came from Giorgianni, which would have violated campaign finance law.
In June, the mayor, his brother and Giorgianni were listed by the city as being late in paying property taxes.
In just Mack's first year in office in Trenton, a city of 85,000 residents, he ran through a string of business administrators. The first resigned after a month, saying the mayor didn't believe in "good government." Another resigned just ahead of pleading guilty to embezzlement on another job.
Mack's housing director quit after it was learned he had a theft conviction. His chief of staff was arrested trying to buy heroin. His half-brother, Stanley "Muscles" David, pleaded guilty earlier this year to official misconduct for directing Trenton Water Works crews to perform private side jobs using city equipment and billing the city.
Late last year, a parks department employee sued the mayor, claiming she was let go after refusing to dole out jobs for the mayor's friends, refusing to give federal grant money to people who didn't apply and inquiring about city funds she said were missing.
Attorney George Dougherty, who represents that employee and two others in wrongful termination lawsuits, expressed relief that authorities had taken action against Mack.
"My reaction today was finally we can all stop saying when will government react to what's been very obvious to us," Dougherty said.
Dougherty, who worked as a city attorney from 1971 to 1990, said Mack has left the city government in disarray.
"Maybe what happened this morning will bring an end to that," he said. "Let's hope."
Councilman George Muschal, a retired police officer who had initially supported Mack but then became a harsh critic, said he didn't know the focus of the investigation but said "when the feds come after you, they come after you for a good reason."
A year ago, Muschal told The Associated Press that City Hall had become corrupted by the Mack administration.
"It won't stop until someone takes him out in handcuffs or he's removed by recall," Muschal said at the time.
Trenton ranks as one of the nation's poorest state capitals, with about 20 percent of the population living below the poverty line.
Mack, who has a master's degree in public policy from Fairleigh Dickinson University, has spent most of his adult life working for municipal government and as an elected county official.
The mayor of neighboring Hamilton Township, New Jersey's largest suburb, also is the target of federal investigators. Mayor John Bencivengo, a Republican, pleaded not guilty in federal court last week to charges of extortion and money laundering.