The Egyptian teacher filmed five Coptic Christian secondary school students impersonating terrorists from the so-called Islamic State.
The video is reported to show the boys laughing and joking pretending to be Islamic State (IS) members praying to Allah. It was recorded at a Christian conference in another village.
The teacher, Gad Younan, is reported to have lost his phone's memory card and a Muslim found it. However other reports say that the video was posted on Facebook.
World Watch Monitor said the discovery of the video led to riots in Beni Mizar and the subsequent expulsion of the teacher from his village.
The teacher Gad Younan, 42, and four of the boys, ages 15 and 16, are in custody, awaiting trial on the accusation of "contempt of religion".
The fifth boy fled his home village and, until recently, was wanted by police. The teacher faces up to seven years in prison.
Regardless of the result it is being reported that the teacher has been "banished" from Al-Nasriyah village by fellow Christians.
It is thought this move was in part to appease local Muslims who reacted to the video by marching. They have been accused of throwning stones at the homes and businesses of Christians.
The boys are too young to serve time in jail, however they could receive suspended sentences.