Joe Biden's son Hunter will now be investigated by a special counsel with additional powers, the US attorney general has announced.
Merrick Garland has elevated the status of David Weiss, the federal prosecutor who has already filed criminal charges in the case.
A plea deal on the tax and gun charges against the president's son collapsed earlier this month.
Republicans are pushing for an inquiry into Hunter Biden's business dealings.
In a surprise announcement at the Department of Justice on Friday, Mr Garland explained that he was making the move after a request by Mr Weiss earlier this week.
The new designation will provide the prosecutor with extra resources to pursue the investigation and to potentially bring further charges beyond the state of Delaware.
Mr Garland said the special counsel would produce a report when his work was done, and that the Justice Department would make as much of it public as was possible.
"The appointment of Mr Weiss reinforces for the American people the department's commitment to both independence and accountability in particularly sensitive matters," Mr Garland said at a news conference.
Hunter Biden's lawyer, Chris Clark, responded in a statement: "We are confident when all of these manoeuvrings are at an end my client will have resolution and will be moving on with his life successfully."
Mr Clark pointed out that the investigation has already gone on for five years.