"In recent days, a report has circulated about the alleged direct or indirect and voluntary or circumstantial involvement, of my brother Juan Antonio Hernandez, with people, or purported illegal activity," the president said.
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"In this country, no one is above the law," he told a news conference. An investigation is underway and he is entitled to due process, the president said.
"The courts will have the final say," the president stressed, also showing a copy of a statement by his brother saying that anyone who has proof of his involvement should present it to authorities.
Earlier this month, army captain Santos Rodriguez Orellana accused the US Drug Enforcement Administration (DEA) of pressuring him to implicate Hernandez's brother of involvement in a plan to kill the US ambassador. The United States is investigating Orellana for alleged corruption and ties to drugs gangs.
The president's brother, Juan Antonio Hernandez, denied any illegal activities in a statement on Thursday. The center-right Hernandez has cracked down against drug cartels that move cocaine into the United States through Honduras since he came to power in 2014, amid concerns from human rights groups.
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Orellana's wife Jennifer Bonilla told AFP that he had requested protection from the state national human rights commissioner for his family, saying he distrusts the military and government.
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