The royal palace said that Prince Ernst August of Hanover, 51, a cousin of the Queen, was in a "serious" condition and under constant medical care with an acute pancreas problem.
His illness renewed the myth that a curse that said the family would never have long and successful marriages is supposed to hang over the Grimaldi dynasty.
Ernst August was admitted to the Princess Grace Hospital on Tuesday the day before Caroline's father, Prince Rainier died
Prince Ernst's office said: "His state of health is serious and requires permanent medical care." Tests, X-rays and scans have been carried out to determine the extent of his "acute pancreatic disorder," it added.
Caroline, 48, is the eldest of the three children of Rainier and Princess Grace, who was killed in a 1982 car accident. Caroline's brother, 47-year-old Albert, succeeded his father as the principality's new monarch.
The German prince's explosive temper has frequently got him into trouble.
He was fined more than £300,000 last November for beating a German club owner on a Kenyan island resort.
He has also been accused of kicking a photographer and offending journalists.
Last year he allegedly gave the stiff-arm Hitler salute to a Hanover airport security guard during an argument.
He caused uproar in 2000 when photos showed him urinating outside the Turkish pavilion at the World's Fair in Hanover.
Members of the House of Hanover continue to seek the British sovereign's approval when they marry, in accordance with the Royal Marriages Act 1772.
In 1999, prior to his wedding to Princess Caroline, the couple received an official blessing from the reigning Queen.