The suspects had been using software such as Lime Wire to hide their video transmissions. The program allows files to be shared person-to-person, as opposed to logging into a website where one could easily be tracked.
The FBI developed technology to find the pornographic files, which then led them to the suspects.
"The men who have been charged are married and single. One is an attorney, one is a police officer, one is a Hollywood film editor ... Several are registered sex offenders," said U.S. Attorney Tom O'Brien.
The police officer was from San Luis Obispo. Attorney Thomas Merdzinski was employed by the state in San Bernardino County.
Another suspect, Eric Lacey, was found in an apartment above a daycare facility. The management had conducted a background check, but because he had no record of convictions, he came out clean.
"Make no mistake, the possession of this imagery ultimately, in many cases, leads to contact with children, which is why we are so concerned about it," said Salvador Hernandez, Federal Bureau of Investigation.
Officials expect further arrests and promise vigorous prosecution.
"I have told my lawyers that I think there is a special place in hell for people that exploit our children. And my job as U.S. Attorney is to keep them in federal prison until to hell. And I'm going to do everything I can to do that," said O'Brien.
All suspects face felony charges if convicted. They could spend as much as 10 years in prison.
The Associated Press contributed to this report.