The US Food and Drug Administration (FDA) told Nestlé it may have to recall the group's Good Start Infant Formula with Iron because tests showed it did not contain the minimum levels of calcium and phosphorus required under US law.
The news threatened to land a fresh blow on the food multinational, which has faced criticism over its infant formula for years, but also highlighted a new dispute over testing procedures.
Nestlé rejected the FDA's test results.
"We have had two independent tests done by absolutely top quality laboratories and we have not been able to confirm the findings of the FDA," said a Nestlé spokesperson.
"There is no question of a recall. We are in contact with the FDA and discussions are in progress."
The FDA first alerted Nestlé to a problem with its Good Start formula on 27 November. Officials found calcium levels around 1.5mg below the 60mg per 100 kilocalories minimum mark, and phosphorous around 1mg below its 30mg minimum.
The agency gave Nestlé 15 working days to sort out the problem. An extension may be granted, but the FDA may seize the products or file and injunction if it is not satisfied. These occurrences are rare, however.
It was still unclear what effect, if any, the incident would have on Nestlé's infant formula sales in the US.
The group is already one of the most boycotted food firms in the world because of allegations that it unfairly pushed its infant formula onto women in the developing world, discouraging them to breast feed.
Nestlé claims that actions against the group have never made a demonstrable impact to its overall sales, however.
It announced Friday a deal to buy Novartis Medical Nutrition for $2.5bn, propelling the firm from relative anonymity to world number two in healthcare nutrition. A spokesperson confirmed the deal did not include Novartis' babyfood division, Gerber.