Footage from September 10 shows a man turning to the 13-year-old girl, known as Janna, on an inner-western Sydney bus, calling her a barrage of names.
The Year 8 student was labelled a "f***ing terrorist", "immigrant dog" among other insults in the clip, later shared online.
Passengers and the 13-year girl reported the tirade to police after alighting at Strathfield Railway station.
Police allege the man disembarked at Liverpool Road and officers arrested a 50-year-old man on Tuesday at a home in nearby Greenacre.
Authorities charged the man with stalking and intimidation intending fear or physical harm.
He was refused bail and will appear before Bankstown Local Court on Wednesday.
The video showed Janna was called a "cock sucking f***ing animal" and a "piece of shit" as well as other slurs.
In the video, the teen told the man she was born in Australia and reminded him of her young age but that didn't stop the abuse.
Janna and her mother told the ABC the attack was "really disgusting".
The abuse began after Janna stood up for another girl in a hijab who the man was allegedly taking photos of without her knowledge.
Another video of the alleged incident recorded the man saying he couldn't "wait 'til they kill all of you", the ABC reported.
State Labor MP for Strathfield Jason Yat-sen Li issued a statement saying he was "horrified and deeply angry" by the alleged incident and congratulated the teen for speaking up.
"In response, she was subjected to [an alleged] vile tirade of racist and Islamophobic abuse," he said.
"Let me be absolutely clear: Strathfield will not tolerate racist or Islamophobic abuse, particularly when it targets children."
Islamophobia Envoy Aftab Malik told the ABC perpetrators were targeting younger victims, according to the Islamophobia Register Australia.
Premier Chris Minns told the broadcaster Muslim women and girls had every right to wear a hijab, catch a bus and go to school without being abused.
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