Kapil Mishra, who has been sacked from the party and the cabinet, said Mr Kejriwal misused his powers as Delhi's chief minister.
Mr Kejriwal on Monday tweeted that "truth will prevail".
The AAP was born out of a massive anti-corruption movement that swept India in 2013.
The party had promised to make "big revelations" in the state assembly on Tuesday.  But it did not comment on corruption allegations, choosing instead to highlight its findings about "electoral fraud".
The AAP said it lost the recently concluded Delhi municipal elections to Prime Minister Narendra Modi's Bharatiya Janata Party because Electronic Voting Machines were rigged.
Mr Modi's party rejected these allegations, and asked Mr Kejriwal to respond to Mr Mishra's claims.
Mr Mishra, who was water minister in Mr Kejriwal's cabinet until last week, said the chief minister had "forgotten the founding values of the party".
But the AAP said in a statement that Mr Mishra was sacked because of his poor performance and accused him of making allegations out of frustration.
Led by Mr Kejriwal, a former tax inspector who reinvented himself as a corruption buster, the party won 67 of the 70 Delhi assembly seats in 2015 in what was a huge setback for the BJP.
Mr Kejriwal promised to bring in good governance, end corruption and make Delhi safe for women.
But the party has since suffered from infighting, reportedly between Kejriwal supporters and more left-leaning factions.
The leader of India's anti-corruption Aam Aadmi Party (AAP), Arvind Kejriwal, has rejected a colleague's allegation that he took bribes.