Police said they had arrested a female nursery worker in Plymouth on suspicion of distributing indecent images of children.
Officers said the 39-year-old was held after searching the Little Ted's Child Day Unit in the city and the woman's home.
Items including computer equipment containing internet images had been seized from the properties and the school closed while officers investigate the case. In a statement, police said they were working alongside Plymouth City Council as part of the enquiry.
"We received information yesterday evening (Monday) about nine o'clock, took it very seriously, had it researched straightaway and by midnight last night we'd arrested a person," chief superintendent Jim Webster told the BBC.
"So our work today is to find out what's happened, where the images have come from, where they've been sent to and any risk to anybody in Plymouth," he added.