Matthew Sheffer, 44, was arrested Friday.
The investigation began after students at a Libertyville middle school reported to school staff that they believed their teacher was taking videos of students toward the end of the school year, officials said.
Officials said images of students that had been altered using artificial intelligence to create explicit images were found on Sheffer's phone.
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"This was a highly sensitive, complex and lengthy investigation. Its success relied on the work of our Investigators and the close collaboration with our partners at the Lake County State's Attorney's Office, Cyber Crimes Division, the Lake County Children's Advocacy Center, and Libertyville School District 70," Libertyville Police Chief Ed Roncone said.
Sheffer is due in court Sunday.
"Protecting children from exploitation and abuse is our top priority. The Libertyville Police Department, our Cyber Crimes Division, ESD K9 Grip, ESD K9 Enzo, and the Lake County Children's Advocacy Center have done great work investigating this case. We are committed to holding these offenders accountable and using every available tool, including digital forensics and K9 resources, to keep our community safe," Lake County State's Attorney Eric Rinehart said.
Officials said they will continue working closely with the families and students impacted by these crimes to keep them informed about charges and connect them with support services.
Libertyville School District #70 said Sheffer had worked at the district for 18 years.
He has been placed on administrative leave.