The incident was reported yesterday from outer Delhi's Baba Haridass Nagar area.
The girl's parents had started taking the services of the school van around a month back, said a senior police officer.
She was always the last one to be dropped home.
Yesterday, before dropping her home, the 26-year-old driver allegedly forced himself on the girl and sexually assaulted her, he said, adding the accused threatened her with dire consequences if she disclosed the matter to anybody.
The girl was bleeding from her private parts when she returned home and she narrated her ordeal to her mother who took her to Rao Tula Ram Hospital, police said.
She was referred to Deen Dayal Upadhyay Hospital where she is receiving treatment, the officer said.
case was registered after her family filed a complaint.
The accused was arrested late last night from Baba Haridass Nagar. He is married with a daughter, said the officer.
Delhi Commission for Women (DCW) chief Swati Maliwal visited the girl in the hospital.
She called for formation of a high-level committee with members from the central and Delhi governments and the DCW to probe the matter.
"4 year old girl raped brutally by her school van driver. Met her in hospital. Give death penalty 2 culprit in 2 months! Give strong msg! (sic)," Ms Maliwal wrote on Twitter.