Steve Asmussen has sacked his assistant trainer Scott Blasi in the wake of allegations of mistreatment of horses in the stable.
Authorities in New York and Kentucky launched an investigation last week after People for the Ethical Treatment of Animals (PETA) provided video evidence from an undercover investigation of Asmussen and his associates.
"The allegations and footage provided by PETA are extremely troubling and we are fully investigating the matter," Robert Williams of the New York Gaming Commission said.
"PETA has offered to assist the commission in its investigation, and we welcome such co-operation."
The PETA website said its investigator worked for Asmussen at Churchill Downs and Saratoga last summer and documented overuse of pain-masking drugs to push horses beyond the point of physical exhaustion.
The Daily Racing Form reported Asmussen had sent a text message on Saturday afternoon announcing "Scott Blasi has been relieved of his responsibilities".
PETA has also accused Asmussen and Blasi of administering drugs to horses for non-therapeutic purposes to boost performance, forcing injured horses to train and race and having one of their jockeys use an electric shocker to make horses run faster.
Asmussen ranks second among United States trainers in career racing victories, with more than 6700. He is among 10 finalists named this month to the National Museum of Racing Hall of Fame with the results to be announced April 25.
Asmussen has two Eclipse Awards as America's leading trainer. He trained Curlin to Horse of the Year honours in 2007 and 2008 and Rachel Alexandra to Horse of the Year in 2009.
He served a six-month suspension in 2006 after a filly he trained tested 750 times over the legal limit in Louisiana for a local anaesthetic used to deaden pain in a horse's legs so it will continue to run.