The probe will examine "whether personal data of Israeli citizens was illegally used in a way that infringes upon their right to privacy and the provisions of the Israeli Privacy Law," the ministry said in a statement.
According to the Israeli law, it said, personal data may only be used to the purpose for which it was given, with the consent of the individual.
The world's largest social-media network is facing growing government scrutiny in Europe and the United States.
This follows allegations by a whistleblower that Cambridge Analytica improperly accessed users' information to build profiles on American voters that were later used to help elect U.S. President Donald Trump in 2016.
Facebook Chief Executive Mark Zuckerberg has promised tougher steps to restrict developers' access to user information.
Facebook and Cambridge Analytica have both blamed the academic who provided the data, Aleksandr Kogan, who gathered it by running a survey app on Facebook. Kogan has said he is being made a scapegoat.
(Reporting by Dan Williams and Ari Rabinovitch; Editing by Mark Potter)
