Some 23 prosecutors and 230 police officers participated in the search of 11 sites in the states of Baden-Württemberg, Berlin, Lower Saxony and Saxony, police said in a statement.
“The company is fully cooperating with the authorities,” said Daimler, which owns Mercedes-Benz.
The group added that the investigation targeted “known and unknown employees of Daimler AG over suspicion of fraud” and misleading advertising related to the possible manipulation of exhaust gas emissions in passenger cars with diesel engines.
Germany's powerful automobile sector has been hard hit by revelations that car giant Volkswagen fitted emissions cheating devices into 11 million diesel engines worldwide.
Since the scandal broke in September 2015, other carmakers have also come under scrutiny.
VW has so far set aside more than €22 billion to cover fines and compensation related to the fraud.
But experts estimate that the final bill could be far higher.