The boy was in agonising pain and pictured crying with cuts and marks across his face and back after he was beaten.
An investigation was launched after the pictures went viral on social media.
The boy was attacked with a metal wire or a stick after he broke a woman's credit card and damaged her phone case, his sister claimed.
The incident took place in the town of Warnes near the Bolivian city of Santa Cruz when the victim was left in the care of his 13-year-old sister in their rented home while their mother was working.
The suspect has been identified as the landlord’s niece, local media reported.
At least two arrests have occurred.
The woman accused the toddler of breaking credit card and damaging her mobile phone case and whipped him with either metal wire or a stick, according to the teen sister.
Images of the boy’s injuries were widely shared on social media.
This prompted Interior Minister Eduardo del Castillo to call for a full investigation.
Social security official Glen Antelo claimed there had been some friction between the niece and the children in the past.
The boy's family will be given psychological and legal assistance over the assault.
Del Castillo said that the suspect has been arrested.
Another woman, whose identity has not been revealed, has been also detained in connection with the alleged assault.
The investigation continues