Rupert Murdoch's News America Inc has donated $1m (£637,000) to the Republican Governors Association ahead of November's US mid-term elections.
The donation from the parent company of Fox News helped the RGA more than double its fundraising in the second quarter of 2010.
The association helps elect Republican candidates to US governorships.
Democrats said the donation meant Fox News had "crossed a bright line" regarding impartiality.
"Fox can no longer pretend that it is a fair and balanced news organisation when Rupert Murdoch greenlights a million dollar contribution to defeat Democratic governors," Democratic Governors Association executive director Nathan Daschle said.
White House spokesman Bill Burton said: "It creates a lot of questions."
Media conglomerate News Corp, of which News America Inc is a subsidiary, defended the donation.
"News Corporation has always believed in the power of free markets and organisations like the RGA, which have a pro-business agenda, [to] support our priorities at this most critical time for our economy," the Associated Press quoted spokesman Jack Horner as saying.
Official filings show the RGA raised more than $19m during the second quarter of 2010, compared to more than $9m in the first quarter.
The Democratic Governors Association reported raising $9m in the second quarter, according to AP.