The RSPCA hit one of the state's biggest puppy farms in a raid outside of Inverell in northern NSW.
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Local MP Adam Marshall said in a statement that a "commercial animal breeding facility" in the area had been the subject of monitoring by authorities for some time.
Police accompanied RSPCA officers to execute a search warrant at the property near Copeton Dam on Wednesday.
Animal welfare lobby group Oscar's Law alleged the property contained "hundreds of breeding dogs". President Georgie Purcell said the farm was the largest they knew of in NSW.
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Mr Marshall, who is also the state's Agriculture Minister, slammed the alleged "potential rogue operator".
"I strongly condemn any acts of cruelty perpetrated against animals, whether they be pets, native animals or livestock," he said.
"Any person in breach of our state's robust animal welfare laws should have the book thrown at them and will be prosecuted."
In a statement, the RSPCA said the raid followed allegations of animal cruelty and noncompliance of state breeding codes of practice.
The RSPCA also raided another property near Wagga Wagga on Wednesday, executing a second search warrant.
Mr Marshall said the raids showed the government took animal cruelty "incredibly seriously".
"The issue of cruelty towards companion animals who may be suffering due to illegal breeding practices is one that is close to my heart," he said.
"One of my first actions in Parliament as the Member for the Northern Tablelands was to Chair the Joint Select Committee on Companion Animals Breeding Practices.
"This was instrumental in bringing in new protections for breeding animals and tracing systems for puppies to weed out any illegal breeding."
Oscar's Law said puppy "factories" were legal under NSW law, which did not require regular inspections or set a cap on dog numbers or litters and said the industry was "largely self-regulated".
Oscar's Law President Georgie Purcell said the industry created a "vicious cycle that needs to be shut down.".