The boys are charged with aggravated sexual assault on a child in the incident which occurred in August.
The arrests were only made last week, after authorities watched security video taken on board the bus.
The video caught the two boys pulling their pants down and forcing the younger boy to perform sex acts on them, police told the Houston Chronicle.
At the time of the incident, the children had just boarded the Houston Independent School District bus and were on the way home from school.
All three boys are special needs students, and authorities weren't releasing their names because they are minors.
The two 10-year-olds face up to 40 years in prison for the sexual assault.
The alleged victim was already transferred to another school.
Houston school district spokesman Jason Spencer says officials were first made aware of the alleged assault when the district's transportation department was asked by a parent on Aug. 30 to review conditions on a bus that transports special needs students to an elementary school.

