Nearly $700 million from 1MDB had appeared in his personal bank accounts while billions more are unaccounted for. He, however, has repeatedly denied the charges.
Mahathir has ordered a travel ban on Najib, his wife, and others linked to 1MDB pending investigations.
A new dawn for Malaysia: Anwar
The search came hours after politician Anwar Ibrahim, a key figure in the new government, was released from jail triggering euphoric scenes with mobs shouting "Reformasi" (Reform).
Anwar declared a "new dawn for Malaysia" as he talks about joining forces with PM Mahathir to oust Najib.
He was thrown into jail on the charges of sodomy and corruption in 2015.
What is 1MDB scandal?
1Malaysia Development Berhad is a strategic development fund set up by Najib in 2009, which was meant to transform Kaula Lumpur into a financial hub by forging global partnerships and promoting FDI. In Jul'15, $700 million sourced from 1MDB was found in Najib's account.