Prime Minister Giorgia Meloni is strongly against the proposal and has urged people to abstain.
Italians are voting in referendums on easing citizenship rules and strengthening labour protections amid concerns that low turnout may deem the poll invalid.
Voting began on Sunday and will continue through Monday.
The citizenship question on the ballot paper asks Italians if they back reducing the period of residence required to apply for Italian citizenship by naturalisation to five years.
A resident from a non-European Union country, without marriage or blood ties to Italy, must currently live in the country for 10 years before they can apply for citizenship, a process that can then take years.
