Three men were arrested on Wednesday while printing fake Ugandan currency at a premise on Kirinyaga Road, Nairobi.
During the operation, police also recovered materials and machines that are used in making fake money.
Officers said they had been tipped off by the public on the illegal activities at the premises, after which they staged a raid.
Two cartons of the fake currency that had been prepared and ready for transportation to Uganda were recovered.
Police say they are looking for more suspects linked to the illegal act.
Cases of fake money minting are normally rampant in Kenya during the electioneering period.
Police have warned the public to be wary of the money they handle.
