Parents of children cared for at Little Stars Nursery in Birmingham have spoken of their shock after being informed of the police inquiry by reporters gathered outside the Nechells Regeneration Project.
A 20-year-old man who was employed as an assistant at the nursery has been arrested on suspicion of child abuse.
The man, from Nechells, was taken into custody in the early hours of Wednesday morning.
He was initially arrested on suspicion of allegedly grooming a teenager over the internet. This had no connection to the nursery and it was during this investigation, in which a number of items were seized from the property, material was found which resulted in the subsequent investigation into alleged serious sexual offences against a child from the nursery.
A force spokeswoman said the nursery had been closed "as a precaution", adding: "West Midlands Police and Birmingham City Council are in the process of contacting parents and guardians of children registered at the nursery."
But at least three mothers who brought their children to the nursery as normal were unaware it had been closed when they arrived at the Nechells Park Road facility.
Sahra Said, who is originally from Somalia, described the allegations of abuse as "horrible things" before being admitted to the centre by a policeman.
Ms Said, whose children are cared for at the nursery, said: "I bring them here when I learn English here. I thought it was open - nobody called me."
Another woman arriving with her three-year-old daughter and eight-month-old son also claimed she had had no communications from either the police or nursery staff.
The mother, who did not give her name, told reporters: "Nobody has contacted me, nobody has told me anything. I study here and I am afraid for my kids really."
A woman at the Nechells Regeneration Project, which comprises a recently-built block adjoining a converted Edwardian swimming baths, said the nursery appeared to be operating normally on Wednesday.
She said: "I don't know anybody at the nursery but there didn't seem to be any cause for concern yesterday."
Superintendent Matt Ward confirmed that the man, who has worked at the nursery for 18 months, was arrested after a warrant was executed at his home for an unrelated matter.
Speaking to reporters at West Midlands Police headquarters in Birmingham, he said: "As a result of that unrelated warrant being executed we recovered material which, when it was forensically examined, led us to believe a series of serious sexual offences against a child had taken place at the Little Stars Nursery."