Sophie Lindley was riding her bike – complete with stabilisers – alongside her dad Dale, when the officer pulled up in his car and told her she had to get off because she was breaking the law.
The little girl was left so distraught by the ticking off that her dad had to carry her to school.
Dale, 35, told his local paper: "We stopped to look at some ducks when the officer pulled over and said she had to get off.
"He said 'The law is the law' and she was not allowed to ride on the path.
"He said 'If I catch you put her on her bike further up the road I will turn around and confiscate the bike'.
"I couldn't believe it."
Sophie's mum, Emma Stephenson, 34, said she understood it was illegal to ride on the pavement.
But she added: "You can't expect a four-year-old to ride in the road, it's not exactly safe. And she has the lead and wears a helmet.
"The most unbelievable thing is they were going to confiscate the bike."
The family doesn't have a car and regularly let Sophie cycle the two mile journey from their home to school in Grantham, Lincolnshire.
Although cycling on pavements is illegal, officers are expected to use discretion with young children.
Lincolnshire Police apologised and said: "Safety is our priority and cycling on the pavement is illegal.
"However, common sense obviously prevails and in the case of young children officers should use their discretion and offer the most appropriate advice for the circumstances."
Roger Geffen, of national charity Cyclists' Touring Club, said the officer was 'wrong'.
He said: "The police officer has forgotten that children under the age of 10 are below the criminal age of responsibility so they can't break laws and can technically ride on the pavement.
"Everyone lets their children ride on the pavement. It is perfectly normal and not criminal."