The man, who remains on the run, broke into the family's home in Kingsford, east Sydney, between 2:45am and 2:50am.
Police allege the man climbed into the young girls room, before indecently touching her.
The footage later shows the man climbing out the same window and shutting it behind him, before jumping over the fence and fleeing.
The girl reported the incident to her mother who contacted police. She was not physically injured in the incident.
The man has been described as around 50 years of age with an Australian or English accent. He was wearing a dark hooded jumper, cargo pants and a hat.
The man was last seen running towards McDonald's on Barker Street, police said.
Superintendent Karen McCarthy said: 'We are asking any member of the community who has seen anything suspicious to come forward.'
Anyone with information is urged to contact Crime Stoppers on 1800 333 000.
This article originally appeared on New Idea.