The incident occurred in Park Croft, Polegate, on November 19 just before 9pm.
The man walked off when the woman’s father appeared.
Police reported that prior to this incident, a man had been seen walking around the Polegate area naked.
A 32-year-old man from Polegate was later arrested on suspicion of sexual assault and outraging public decency and released on bail while police continue with their enquiries.
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PC Harry Thorpe said: “From the enquiries we have undertaken, we believe there are other occasions that a man has been seen naked in public, sometimes when children are present.
“We take reports of this behaviour extremely seriously. We would like to hear from anyone else who was also in the area at the time of the incident or who recalls seeing a man exposing himself in public in the Polegate area.
“Witnesses or anyone with further information is asked to report it online or by calling 101, quoting serial 1252 of 19/11.”