Mondadori Magazines France and local photographer Valerie Suau were placed under investigation earlier this month over possible criminal exploitation of the images, which appeared in the French Closer magazine last September, according to Caroline Chassain, Nanterre prosecutor spokeswoman.
Chassain added that Suau's employer, local newspaper La Provence, was also placed under formal criminal investigation Monday.
The photos showed the Duchess of Cambridge relaxing at a private villa in Provence, in southern France, sometimes without her bikini top and, in one case, her suit bottom partially pulled down to apply sunscreen.
If convicted, Closer magazine could face closure for up to five years; the photographer could face fines and - much less likely - a year in prison. The potential punishment for La Provence was not yet clear.
Though the development, which moves the investigation one step toward a full-blown trial, is likely to please royal officials, it will probably take several months before the investigating judge decides whether or not to fully charge the parties on a possible breach of the Duchess of Cambridge's privacy.
"One factor in the royal couple's advantage is that they won the civil case last September. There is already a privacy decision out there favorable to the Kate and Prince William ... They have one leg up," said Christopher Mesnooh, an American lawyer working in France for Field Fisher Waterhouse.
"It's a delicate balancing act for the judge to reconcile (press) freedoms with the right to privacy. Yes, in France there are strong privacy laws, but don't forget it's a country also with robust freedom of expression," said Mesnooh.
The blurry photos have been called a "grotesque and totally unjustifiable" abuse of privacy by British royal officials. Despite efforts by Prince William and Kate to halt their use last September they went on to be published in Italy, Ireland, Sweden and on the Internet. However, no major British publication carried the photos, including Rupert Murdoch's top-selling U.K. tabloid The Sun, which last year ran photos of a naked Prince Harry cavorting in a Las Vegas hotel room.
The first major press incident involving William and Kate brought back memories of William's mother Diana being hounded by paparazzi in France in the hours and days before her fatal car crash there in 1997.