Liverpool’s mayor Joe Anderson has been arrested on suspicion of conspiracy to commit bribery and witness intimidation.
He and four others were held as part of an investigation into the awarding of building contracts in the city.
It is understood the Labour Party has suspended Mr Anderson pending the outcome of the case.
The year-long police probe focussed on 32-year-old property developer Elliot Lawless, who was arrested in January.
It is not known whether he is among the five arrested earlier.
Liverpool City Council said it is co-operating with Merseyside Police.
A police statement said those arrested include two men, 33 and 62, both from Liverpool, on suspicion of conspiracy to commit bribery and witness intimidation.
A 46-year-old man from Ainsdale has also been arrested on suspicion of the same offence.
The other two arrested men are a 72-year-old man from Liverpool and a 25-year old from Ormskirk, who have been arrested on suspicion of witness intimidation.