Police began their investigation in September after her oldest daughter, aged 15, and her former partner filed a complaint at a police station in the southwestern province of Seville, police said in a statement on Wednesday.
The girl said her mother took pictures and made videos of her and her two sisters, aged seven and eight, in suggestive poses, including with a pacifier in their mouth and wearing braids.
Another eight-year-old girl, the niece of the woman's former partner, also appeared in the images made and sold by the woman.
"At first the mother told them that the images were for fashion castings and the pictures of them nude and in their underwear were needed to show their size," police said in a statement.
But over time the woman's oldest daughters realised that the images were sold to men over a dating website.
"The mother then told them they needed money to eat and there were men who paid money for these images. The minor also told officers that she and her sisters were repeatedly beaten with a stick by her mother if they refused to take photographs."
Police said the 15-year-old girl was sent to meet with the men who bought the images to collect the money.
The girl gave police a mobile telephone and a computer belonging to her mother that had images of her and her sisters naked.
Police arrested the woman on October 15th. They also arrested one of buyers of the images, a 49-year-old man, seven days later.
The woman has been ordered to stay away from her daughters and the niece of her former partner while the investigation continues.