A US couple have been charged with child neglect after police discovered a video of their 12-month-old daughter playing with a .40 calibre handgun.

Toni Wilson, 22, and her partner, Michael Barnes, 19, were arrested after police discovered the shocking footage on a mobile phone, while investigating Barnes for trying to sell a handgun to an undercover officer outside an elementary school, 14 News reported.

In the video, the toddler is seen playing with the weapon while sitting on a bed at the couple's home in Evansville, Indiana.

The child is seen waving the gun and holds it against her face. At one point, she inserts the muzzle of the gun into her mouth.

Barnes is heard in the background encouraging the toddler to shoot and says "pow". The child is heard replying "pow", before holding out the gun and pretending to fire.

A woman's voice, believed to be Wilson's, can also be heard nearby. Police reportedly discovered a second similar video of a child playing with a weapon.

During an interview with police, Wilson initially claimed that she did not know Barnes had a gun at the time and later told officers the weapon in the video was a pellet gun.

Sergeant Jason Cullum, of Evansville Police Department, described the footage as "mind-numbing".

"When we try to encourage these kids to be good members of our community, and you see somebody that's working that hard against it, it just makes you wonder how many other children may be living in this type of situation and what the outcome is going to be," he said.

Wilson's daughter is currently in emergency care. She is joined by two one-month-old twins, who were also living at the property at the time, and who are also Barnes' children from another relationship.

Wilson and Barnes have been arrested on charges of child neglect, criminal recklessness with a deadly weapon, and allowing a child to possess a firearm.