The children had just sat down to watch the new Paddington 2 film when the pornographic video popped up.
Parents were furious after schoolchildren as young as nine were accidentally shown porn at school instead of the new Paddington 2 film.
The Year 5 pupils sat down to watch the film, which was only released in November, during an assembly known as "golden time" at Croft Academy in Walsall, West Midlands.
But they were stunned when the pornographic video popped up while the film was being streamed online, according to the Daily Mail.
In a letter to parents and carers, the school wrote that there was a "failure in our filters" which led to the children seeing the video.
The letter reads: "During Year 5's Golden Time today, whilst watching Paddington Bear we had a failure in our filters. An inappropriate image came up.
"You do not expect to have it in a school; you try your best to prevent it at home. Some children take it with a pinch of salt but other kids are traumatised.
"We were all disgusted considering the children had to tell us.
"Parents are annoyed that we were made aware by giving a letter to the Year Five students, who can read, so it is not only wrong to see it but they have to repeat it.
"We asked a member of staff if they had even watched the film beforehand and they had not."
According to parents, the school has not yet apologised and there had been no information given on how to help guide the parents on how to deal with it.
A spokesman from the school said: "An issue with web content filtering software occurred on Friday afternoon.
"The issue has been reported to the Trust, the Local Authority Designated Officer and the service provider, in accordance with academy procedures.
"An investigation is under way and to comment any further would be inappropriate at this point."
A meeting is set to be held today between parents and teachers at the school in order to discuss the incident.