A man has been arrested at a house in Blackley as neighbours witnessed police removing a number of coffins from the property.
Officers were called to Capricorn Road on Friday night to reports of suspicious circumstances.
A man in his 50s was arrested on suspicion of fraud and remains in custody for questioning.
A funeral service business which is registered to the house is listed online.
Police have not released any further details about the nature of the investigation.
Neighbours reported seeing a number of coffins being removed from the property and placed inside a private ambulance.
Footage seen by the Manchester Evening News shows two coffins being wheeled from the house on Saturday lunch time.
On Saturday night, a police car guarded the front of the property while detectives continued their enquiries.
A number of plain clothed officers were seen searching the house throughout the afternoon.
A funeral hearse can be seen in the driveway covered partly by tarpaulin.
Local residents say a private ambulance parked outside the house was taken away by police.
A spokesperson for Greater Manchester Police said: "Police were called at 8.45pm on Friday evening to reports of suspicious circumstances.
"Officers attended and arrested a man in his 50s on suspicion of fraud.
"He remains in police custody.
"A cordon is still in place."
