Russia says The Wallstreet Journal reporter was caught “red-handed” while working in Yekaterinburg.
The US government has condemned the arrest, while The Wallstreet Journal denies the charges.
The publication said Gershkovich had lost of contact with his editors while working in Yekaterinburg on Wednesday afternoon.
Russia's FSB security service confirmed that a journalist had been detained and alleged that he was working on US instructions by collecting top secret information on Russia.
Espionage in Russia carries a maximum jail term of 20 years.