MOSCOW — The Russian authorities have detained an acclaimed theater director on suspicion of embezzling more than $1 million in government funds, investigators said on Tuesday, renewing fears of a crackdown on artists in the country.

The director, Kirill S. Serebrennikov, leads the Gogol Center, one of the most prominent and progressive artistic venues in Moscow. He is accused of working with accomplices to misappropriate 68 million rubles, or $1.1 million at current exchange rates, that had been awarded to Studio Seven, a theater production company he led.

Mr. Serebrennikov was formally accused of large-scale fraud on Tuesday, but he denied any wrongdoing during questioning, investigators said. A court in Moscow will decide on Wednesday whether he will await trial in detention, under house arrest, or under a less stringent set of restrictions. If convicted, he could face up to 10 years in prison.

Investigators searched the Gogol Center and Mr. Serebrennikov’s apartment in May, but the theater director was released after questioning. The company’s general director, chief producer and accountant were all detained later and charged with fraud, however.