Fiat Chrysler Automobiles (FCA) has been accused of using auxiliary emission control devices on 104,000 vehicles sold in the US.
EPA administrator Cynthia Giles said: "All automakers must play by the same rules and we will continue to hold companies accountable that gain an unfair and illegal competitive advantage.
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"Failing to disclose software that affects emissions in a vehicle's engine is a serious violation of the law."
She added the EPA would "continue to investigate the nature and impact" of the devices.
FCA said it was "disappointed" with the accusations and would work closely with the agency to resolve the matter "fairly and equitably".
It also said it used "state-of-the-art emission control systems hardware", such as selective catalytic reduction, in order to comply with "regulatory requirements" detailed by the EPA to lower exhaust emissions.
Meanwhile, the European Commission has been asked to look into whether FCA used exhaust manipulation devices in cars sold in Europe, reports AutoExpress.
The magazine says Germany's KBA transport authority found Fiat diesel models "cut out their pollution systems" shortly after emission tests had finished.
"According to reports, Fiat vehicles turned off their pollution control systems after 22 minutes, while the official test cycle for diesel cars lasts for 20 minutes only. it adds.