Prosecutors in Cassino, south of Rome, opened a probe into monsignor Gerardo Antonazzo after receiving a letter from a seminarian accusing the bishop of sexually molesting him and seven other adults, La Repubblica said.
"I must stress how utterly unfounded the accusations are," Antonazzo was quoted as saying, adding that he had not been informed that he was under investigation.
Prosecutors said the probe was ongoing, refuting earlier reports that they were ready to arrest the bishop.
"The documents (on Antonazzo) have been sent to the Holy See, so it can evaluate eventual measures to be taken," the online newspaper Il Tempo said.
Pope Francis has approved the creation of an internal church tribunal to punish bishops who cover up sex abuse by priests, but networks of abuse survivors point out that the Holy See has shied away from legal action so far.