"Cases where parents are involved are much rarer than those in which predators are chatting with kids directly," said Parry Aftab, executive director of WiredSafety, an Internet safety group.
"Though it is happening less frequently, the consequences are more severe. If parents are involved, there is almost a 100 percent chance that these kids are already being molested and will continue to be abused," she said.
In March 2006, the FBI arrested Kenda Henry of Dallas, whom police accused of using the Internet to prostitute her three young children to pedophiles from as far away as Great Britain. Henry was arrested when authorities from Canada, the United States and Interpol busted the world's largest child pornography ring.
Police say she was linked to Brian Tod Schellenberger, a North Carolina father accused of creating and circulating hundreds of pornographic images and raping a 3-month-old infant. Schellenberger was sentenced to 100 years in prison for posing a 6-year-old girl and infant boy in pornographic positions.
Two months before Henry and Schellenberger were arrested, a Canadian woman pleaded guilty to providing pornographic pictures of her 8-year-old son to her "master" in a chat room dedicated to bondage sex.
In 2005, Teri Anderson was profiled on "America's Most Wanted" and accused of creating pornographic images of her two young sons. Anderson, already serving a term at a Utah prison for production of child pornography, was identified by her mother and later pleaded guilty.
Aside from parents prostituting their kids outright on the Internet, the Web creates other points of contact for predators to find parents with kids whom they can eventually abuse. Pedophiles will often use the net to begin dating unsuspecting single mothers, police say. Once they've established a relationship with the child's mother, they'll begin to abuse the kid.
"Other times parents will post innocent photos of their children on modeling sites. The parents are gradually induced to go further by pedophiles, putting their children in sexier bathing suits or negliges and exchanging gifts for access to the kids," said WireSafety's Aftab.
"It begins innocent enough, but doesn't end that way," she said.
Exact numbers of actual parents prostituting their children both in the real and virtual worlds are difficult to come by, academics and law enforcement authorities told ABC NEWS.
But in the FBI's fiscal year that ended in August, the government opened a total of 2,443 new investigations into child sex crimes on the Internet and achieved 1,015 convictions. In 2006, the FBI opened a total of 2,135 new investigations and won 1,013 convictions.
The bureau said it doesn't keep statistics of how many of those cases involved parents.
Children are more likely to end up as prostitutes in the real world than the virtual world, experts said. The Department of Health and Human Services puts the number of children at risk for sexual exploitation in the United States at around 400,000.
But according to Janice Wolak, a professor at the Crimes against Children Research Center at the University of New Hampshire, it's difficult to know how accurate that number is.