The Times reported that a channel named Toy Freaks, which has attracted seven billion views since its launch in 2011, had videos exploiting children.
One video described in the report showed two girls, one nine years of age, wearing baby clothes, sucking pacifiers and being terrified by live snakes.
YouTube said, in a statement issued to Campaign, that the channel had been terminated for violation of its policies.
"We take child safety extremely seriously and have clear policies against child endangerment. We recently tightened the enforcement of these policies to tackle content featuring minors where we receive signals that cause concern. It’s not always clear that the uploader of the content intends to break our rules, but we may still remove their videos to help protect viewers, uploaders and children," the statement said. "We will be conducting a broader review of associated content in conjunction with expert Trusted Flaggers."
Advertisers, including Iceland, O2 and Which?, have suspended advertising after the report demonstrated to them that their brands were appearing on clips in which "youngsters were distressed and in 'inappropriate' and 'disturbing' scenarios".
Other advertisers named were Yamaha Music and Dropbox.
The channel was run by a single father from Illinois, Greg Chism, and the children featured are his two daughters.
This is not the first time The Times has run an exposé that calls YouTube's brand safety into question. In February, the title broke the news that the platform was running advertising against extremist content. Advertisers pulled out and some have still not returned to the platform.
The issue cropped up again in June when it was learnt that UK political party ads were running against extremist content.