German authorities are investigating a second spy case reportedly involving the US.
Police raided properties in the Berlin area on "initial suspicion of activity for an intelligence agency", federal prosecutors say.
Daily Sueddeutsche Zeitung reported the man worked in "the military field" and is suspected of spying for the United States.
A 31-year-old German intelligence employee was arrested last week on suspicion of spying for foreign powers since 2012.
German media have reported he worked for the United States and offered his services to Russia.
The case has frayed relations between Berlin and Washington, already strained by reports last year that the National Security Agency spied on Chancellor Angela Merkel's mobile phone.
A German official said the US ambassador in Berlin went to the Foreign Ministry in Berlin today.
"We have investigations in two cases of suspected espionage, a very serious suspicion," government spokesman Steffen Seibert said.
The Sueddeutsche Zeitung said the man worked at the Defence Ministry, while Die Welt said he was a soldier in the German army who had aroused the suspicion of a military counter-intelligence agency because of close contacts to alleged US spies.
Defence Ministry spokesman Lieutenant Colonel Uwe Roth declined to confirm the reports, but said the case fell "into the ministry's area of responsibility".
He said Defence Minister Ursula von der Leyen had been informed.
The US ambassador to Berlin - John B Emerson - was at the Foreign Ministry today for a meeting with a senior official, a ministry spokesman said.
A US Embassy spokesman said the meeting was arranged yesterday at the embassy's request.
German foreign minister Frank-Walter Steinmeier said he was at a loss to understand why the US would feel the need to spy on his country.
"We speak to each other all the time and nobody keeps their views secret," he said in an interview with Saarbruecker Zeitung. "The attempt to use conspiratorial methods to find out about Germany's position isn't just unseemly, it's unnecessary."
Lora Anne Viola, an assistant professor in American foreign policy at Berlin's John F Kennedy Institute, said the spy cases appeared to herald a new low in US-German relations.
"I think it's going to be difficult to repair this with words alone," she said. "Without partners, without Germany, it's very difficult for the US to act on the foreign stage."
She cited the case of Ukraine, where Germany has played a key role reaching out to Russia while also rallying European countries around the idea of sanctions.
Erich Schmidt-Eenboom, an expert on Germany's intelligence agencies, said the reaction in Berlin would likely have been muted at any other time.
"Without the NSA scandal there wouldn't be such a fuss. They would have resolved this the way they've done since the 1950s, which is switch off the German spy and send his American handler home.
"But the NSA scandal is forcing the German government's hand," he said. "It's been trying for months to play down the scandal so this new case has blindsided them."
Mr Schmidt-Eenboom said cooperation between the American and German intelligence agencies - particularly the CIA and its German counterpart the BND - was traditionally good.
"BND staff have always talked freely with their American counterparts, but to place a mole in a friendly agency, that's a new dimension. The German intelligence community is up in arms," he said.