Northcott Community Special School in Bransholme, Hull, told parents "nasty challenges" are appearing in the middle of videos which are supposed to show Fortnite gameplay or Peppa Pig.
Following complaints more than a year ago, Youtube said it had taken steps to add more moderation and step up enforcement of guidelines for videos aimed at children.
The US-based paediatrician who runs the blog Pedi Mom writes that she could barely believe her eyes when saw the video.
The pediatrician found seven more unsettling videos on YouTube Kids on Friday alone. "I don't doubt that social media and things such as this is contributing". She said she found videos glorifying not only suicide but sexual exploitation and abuse, human trafficking, gun violence and domestic violence.
According to the Washington Post, Andrea Faville, a spokesperson for YouTube, said that the company is working to make sure that its platform is "not used to encourage risky behavior and we have strict policies that prohibit videos which promote self-harm".
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There have also been reports of Momo appearing on WhatsApp, other social media platforms and video games. "Every quarter, we remove millions of videos and channels that violate our policies and we remove the majority of these videos before they have any views".
A fellow mother, a physician, had initially alerted her to the clip on YouTube Kids, saying it had been "intentionally planted on YouTube Kids to harm our children".
Then there was the Elsagate incident in which disturbing videos that initially seemed to be parodying children's films such as Frozen but soon turned violent or sexually themed.
In her post, shared in the Love Westhoughton Facebook group, she said: "When I collected him from school the teacher asked to talk to me".
This extremely disturbing challenge conceals itself within other harmless-looking games or videos played by children and when downloaded. The statement said, "We appreciate people drawing problematic content to our attention, and make it possible for anyone to flag a video". We are making constant improvements to our systems and recognize there's more work to do. Kids are young to understand the consequences and it would be too late before parents realise it. "The kids are the digital natives and the parents are digital immigrants".
In a tweet, the school said: "We are aware that some nasty challenges (Momo challenge) are hacking into children's programmes".
For confidential support in the United States call the National Suicide Prevention Line on 1-800-273-8255. To learn how to help someone in crisis, call the same number.