The app was disguised as a game called "Banana Plug," a play on UC Santa Cruz's mascot, the Banana Slug.
It was being advertised on flyers all over campus.
Suspect Colin Howard, 18, is from Sunnyvale. A Homeland Security agent alleges Howard developed the app, which offered contraband for sale - including cocaine, "molly," and "shrooms."
It was available on the Apple App Store.
An affidavit also says customers were invited to make special requests.
An undercover sting with multiple drug buys ended with Howard being arrested last Friday.
He's charged with four counts of distribution and possession with intent to distribute cocaine and methamphetamine.
He was released from custody after his court appearance Tuesday. If convicted, Howard could face decades in prison and millions in fines.
See the full release with more information from the Department of Justice here.