Police say Anthony Dattilo, 36, was arrested Thursday night after the incident at the Lincoln Motel in Bensalem early Wednesday.
Investigators got word of the incident after the teen texted her family members that she was being held against her will.
Authorities say the teenager was forced to watch Dattilo and her 21-year-old cousin have sex.
The Bucks County Courier Times reports that afterwards Dattilo allegedly fondled the girl and offered her $100 to have sex with him, but she refused.
"After he had relations with the 21-year-old, he then started moving on to the 14-year-old where he inappropriately started touching her. That's when the police knocked on the door," said Sgt. Andrew Aninsman of the Bensalem Police Department.
Action News spoke with Commissioner Charles Ramsey who says authorities are working to remove Dattilo from the force.
"He's suspended with intent to dismiss. We're in the process of looking into his background to see if there is anything that we should have picked up on," said Commissioner Ramsey.
Dattilo has been a police officer for 12 years. He worked in Northeast Philadelphia's 2nd District.
He was released on $500,000 bail and faces aggravated indecent assault and other related charges.