He pleaded not guilty to three counts of criminal breach of trust and one of abuse of power, and was freed on bail.
Mr Najib is accused of taking $700m (£517m) from a state fund he set up.
Police have recovered $273m in luxury goods and cash from raids on properties linked to Mr Najib. He and his wife say the items were legally acquired.
A new investigation into the state development fund 1MDB began after his shock election loss in May.
Mr Najib was arrested by anti-corruption authorities on Tuesday and spent the night in detention.
In a video posted on Twitter a day earlier, he appealed to the public not to believe the reports, saying that not all of the accusations were true. "I have not had a chance to defend myself," he said.
The charges against him each carry a maximum of 20 years imprisonment.
The bail amount was set at 1m Malaysian ringgit ($250,000; £190,000).