The rover landed in December as part of China's Chang'e-3 mission - the first "soft" landing on the Moon since 1976. It was expected to operate for around three months.
Earlier this month, the Beijing Aerospace Control Centre said that Jade Rabbit, also known as Yutu, had successfully explored the surface of the Moon with its mechanical arm.
The malfunction emerged before the rover entered its scheduled dormancy period on Saturday, Xinhua reported, citing the State Administration of Science, Technology and Industry for National Defense.
Scientists were organizing repairs, the news agency added, without providing further details. The rover was due to become dormant for 14 days during the lunar night, when there would be no sunlight to power the rover's solar panel, reports said.
The malfunctioning rover presents the first public mishap China's ambitious space program has experienced in years, following several successful manned space flights.
Referring to a Chinese folktale about a rabbit on the Moon, one microblog user wrote: "Whatever happens, we must thank Jade Rabbit. When our generation tells stories to our children, we can confidently say: 'There really is a Jade Rabbit on the moon!'"
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