The incident was reported from a school run by the municipal corporation in East Delhi's Jagatpuri area on Wednesday afternoon.
The boy was rushed to Guru Teg Bahadur hospital by his family after he told them about the incident which allegedly occurred inside the school premises.
The accused, identified as Pramod, is in his early 30s. He was arrested following the victim's statement to the police.
The child told the police that he was sexually assaulted inside the school bathroom, where his teacher allegedly took him on the pretext of providing some eatables.