Waha Long, the 32-year-old founder of the Underprivileged Children School in the northwestern tourist hub of Siem Reap, could face up to five years in jail if convicted of child sex charges.
"He made teenagers staying at his home give sex to foreigners who donated funds to him," provincial anti-human trafficking police chief Duong Thavary told AFP.
The suspect allegedly provided at least four boys, in pairs, to have sex with donors, she said.
The arrest came after a former volunteer at the school, which offers free English lessons to poor children, filed an allegation of child sex trafficking.
More From This Section
"We have all the evidence against him," Thavary said, adding that the suspect was expected to be charged in court tomorrow.
Visiting schools and orphanages has become a tourist attraction in Cambodia but campaigners have long raised concerns that the activity puts vulnerable children at risk.
Samleang Seila, country director for child rights group Action Pour Les Enfants, welcomed the crackdown.
"This is a wake-up call for the authorities to be careful about the opening of orphanages," he said.