Four people were arrested at Korinda in Busia County on Friday with Sh3 million in fake US dollars and Sh93,000 in fake local currency.
Police officers found the money when they raided Robert Wesonga's house.
They also found a security stamp bearing the name of an international agency and two spray bottles containing a liquid suspected to be used in production of fake currencies.
The DCI said its officers arrested Mr Wesonga alongside Francis Mutunga, Ben Abungu, and Henry Makokha.
The four will be charged with being in possession of papers resembling banknotes, contrary to section 367(a) of the Penal Code.