The public prosecutor for the region confirmed to AFP that the president and vice-president of the association that brought the children from Leverkusen, Germany to the village of Saint-Julien-de-Peyrolas in southeast France were being held on suspicion of causing unintentional injury and endangering the lives of others.
Prosecutor Eric Maurel said the two were also under investigation for "running an unauthorised campsite".
On Thursday, 119 children were evacuated from the site, about 60 kilometres north of Avignon in the Gard region, after the Ardeche River burst its banks, swamping the campground in a fast-flowing, muddy torrent.
Nine children suffered minor injuries, according to AFP.
A German man, who was with the group, was swept away by the floodwaters in his camping trailer, which police said was later found "empty and in pieces" near the river.
Rescue workers spent a second day on Friday searching for the man, who was named by police as Rudolf Rogowski, aged 66.
Flash floods follow heatwave
The emergency services described scenes of panic on Thursday as waist-high water surged through the campground, with children found "dangling from the trees".
Maurel said local authorities had warned the German group earlier this week that the site was at risk of flooding after the heatwave that had left France parched ended with dramatic storms.
The youngsters were evacuated to a community centre where they spent the night, along with other holidaymakers.
The media was not allowed access to the hall. The Jugendfoerderung Saint-Antonius association turned down requests for comment.
Founded in the 1950s by a Catholic priest to provide affordable holidays for children in the industrial Rhineland region, it launched an appeal for donations on its website to help meet costs arising out of Thursday's dramatic rescue.
A total of 1,600 people, mostly campers, were evacuated Thursday in the Gard, Ardeche and Drome areas of southeast France.