A civilian Defense Intelligence Agency analyst alerted authorities to evidence that officials at US Central Command (CENTCOM) were altering intelligence assessments prepared for policy makers, including President Barack Obama, government officials told the Times.
CENTCOM is the military headquarters overseeing the American-led bombing campaign and other efforts against the Islamic State.
The investigation is looking into whether military officials changed the conclusions of draft intelligence assessments during a review process and then passed them on, government sources told the Times.
Government rules state that intelligence assessments "must not be distorted" by agency agendas or policy views.
In the past several weeks, intelligence officials brought the claims of wrongdoing to the intelligence community's inspector general. Officials found the claims to be credible, and advised the House and Senate Intelligence Committees, as required by law. The Pentagon's inspector general then opened the investigation.
Since Obama authorized a bombing campaign against the Islamic State last summer, some parts of Iraq have been retaken from Islamic State, while others remain under the group's control. Similarly, pronouncements about the progress of the campaign have varied widely.
Recent intelligence assessments, including some by the Defense Intelligence Agency, show how little the Islamic State has been weakened over the past year, the Times reported, citing officials with access to the classified assessments.