An alleged former victim set up a hidden camera and filmed Father Luiz Marques Barbosa engaging in sexual activity with the man.
Reportedly, the 82-year-old priest from Arapiraca was already under investigation for sex abuse when a news channel aired the footage.
Arapiraca, located in northeastern Brazil, is already the site of two ongoing investigations involving priests having sex with boys or men.
The Vatican has confirmed that three priests are under investigation.
When confronted by SBT television network and asked if he had ever sinned, he responded "Who has never committed a sin?"
Later on when questioned if he had ever abused boys, Barbosa said that was a question he could only answer in confession.
During the broadcast, three former altar boys gave accounts of sexual abuse by priests.
The world's largest Catholic population is in Brazil, with nearly three-fourths of the nation's 140 million citizens calling themselves Catholic.
This latest scandal involving sex abuse is added to the widespread worldwide sex abuse by priests in the Catholic church.
On Tuesday in Chile a man who previously taught in Roman Catholic schools in Spain was arrested on suspicion of sexually abusing children.
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