Conservative candidate Craig Mackinlay, who defeated Nigel Farage in the 2015 general election, has been charged over allegations relating to his election expenses.
The Crown Prosecution Service said Mr Mackinlay, 50, and two Conservative campaigners - election agent Nathan Gray, 28, and party organiser Marion Little, 62 - had been charged with offences under the Representation of the People Act 1983.
A spokesman for Mackinlay - who won South Thanet for the Conservatives - declined to comment but in a statement the party said it believed the allegations were unfounded and that all three had done nothing wrong.
Last month the CPS announced it would not be taking action against any other Conservative MPs or officials over allegations of irregularities in relation to expenses incurred by the party's 2015 battlebus tour.
Commenting on the news during a campaign visit to Doncaster, Mrs May said: "The Conservative party continues to believe that these allegations are unfounded.
"Craig Mackinlay is innocent until proven guilty and he remains our candidate."
A Conservative spokesman said: "The legal authorities have previously cleared Conservative candidates who faced numerous politically motivated and unfounded complaints over the party's national battlebus campaigning.
"We continue to believe that this remaining allegation is unfounded. Our candidate has made clear that there was no intention by him or his campaigners to engage in any inappropriate activity.
"We believe that they have done nothing wrong, and we are confident that this will be proven as the matter progresses."
Mr Farage, who was beaten into second place by Mackinlay in 2015 by a margin of 2,812 votes, welcomed the CPS announcement.
The former Ukip leader predicted that the contest in the current election in South Thanet - where Mackinlay is again standing as the Conservative candidate - would now become a "straight fight" between Ukip and Labour.
"Once again it is bad judgment from Theresa May. Why on earth would you allow someone to go ahead as General Election candidate when this cloud was clearly hanging over him? There will be questions."
Labour leader Jeremy Corbyn, campaigning in York, declined to be drawn on the CPS decision.
"I think it is a very bad road when democratically elected politicians start offering a running commentary on independent judicial processes. We have to have total separation of political and judicial powers in this country," he said.
In a statement, the CPS said the decision to press charges came after prosecutors received a file of evidence from Kent Police in April concerning allegations relating to Conservative Party expenditure during the 2015 election campaign.
"We then asked for additional inquiries to be made in advance of the June 11 statutory time limit by when any charges needed to be authorised," it said.
"Those inquiries have now been completed and we have considered the evidence in accordance with the Code for Crown Prosecutors.
"We have concluded there is sufficient evidence and it is in the public interest to authorise charges against three people."
Last month the CPS said it had considered files from 14 other police forces but had decided not to bring charges against any other Conservative MPs or officials.
It said that while campaign spending returns may have been inaccurate there was insufficient evidence to prove that any candidate or agent acted dishonestly.
The investigations centred on claims that expenses relating to busloads of Conservative activists sent to key seats were wrongly reported as part of the party's national spending rather than in the candidates' local returns.