Sixty-two-year-old Leimome Cheeks was arrested and charged with two counts of child endangerment, WREG reported.
According to police, the children were spotted Saturday afternoon in the 3700 block of Elvis Presley Blvd. near Graceland.
She said they were in the kennels for a 25-mile journey from her home in Whitehaven to Collierville.
The temperature reached a high of 95 degrees Saturday in Memphis.
The Commercial Appeal obtained video appearing to show Cheeks, 62, letting a girl out of one of the kennels and closing the metal grate behind her. "I couldn't see her actually doing that", said neighbor Skylarr Blake. She seems like a nice lady.
Neighbors of Cheeks stated that she had recently purchased two German shepherd puppies and her actions were totally out of character.
The video was filmed by a concerned citizen who said he to happened be in the right place at the right when he witnessed the unusual sight.
The footage shows Cheeks open the cage for one of the children, seen wearing turquoise leggings and a blue T-shirt.
In a freaky story, a woman was arrested for driving kids around, not in booster seats or in the back seats, but in two pet kennels placed in the back of her auto.
He aded that the incident could have been an "honest mistake" and that the grandmother should "get help".
The children at the center of the case are not in the custody of the Department of Children's Services, but DCS is investigating the family. She was being held in Shelby County Jail on Sunday night.