Brian J. Beaty, 47, was booked the Putnam County Jail just after 2 a.m. He is being held without bond.
Beaty was arrested by detectives from the Putnamville Post of the Indiana State Police.
A release from the ISP said an investigation in the case began on Thursday after officers were contacted by representatives from the Indiana Department of Child Services.
"The child services abuse hotline received a tip about the possible molestation of a 14-year-old female in Putnam County," the release, prepared by Putnamville ISP Public Information Officer Sgt. Joe Watts said. "During the investigation, detectives discovered that not only was the 14-year-old female allegedly a victim of molestation, but her 15-year-old sister was as well."
The release said the acts of molestation allegedly committed by Beaty occurred "on numerous occasions over the last three years" at Beaty's home in Fillmore.
The alleged victims are now living outside of Putnam County.
"The investigation is ongoing and additional charges are possible," the release said.
The investigation was conducted by ISP detectives Sgt. Troy Stanton and Sam Stearley.
An initial hearing date for Beaty has not been set.
Class A felonies are punishable by a maximum of 50 years in prison.
Beaty has no prior criminal history.