The Buddhist temple, which is a UNESCO world heritage site and the birthplace of kung fu, reported the case to police on Monday and said the rumours are false.
Xinhua reported that the rumours have been circulating online that abbot Shi Yongxin, 46, was caught paying for sex during a police raid.
The temple posted a statement on its website on Sunday that the rumours were vicious and libel, and had hurt the feelings of Buddhists, as well as tarnished the reputation of both the Shaolin temple and the abbot.
"Shaolin Temple and Abbot Shi feel deeply sorry for this and reserve the right to take legal action," the online statement said.
Shi is the temple's 30th abbot and is known as the "CEO of Shaolin" for his pursuit of commercial development since taking over as abbot a decade ago.
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