The incident reportedly took place at around 6pm on Sunday, July 12, on Bournemouth beach, where a man is said to have swum up to a family group and touched the woman on the bottom over her clothing.
The suspect is described as being of Indian descent, around 5ft 6in tall, with black hair and a small stubbly beard.
He was wearing a white T-shirt and black shorts at the time of the incident.
Police arrested a 35-year-old man from London on suspicion of sexual assault.
He has since been released on conditional bail.
Police constable Matthew McGuinness of Dorset Police said: “We believe that there were independent witnesses that saw the incident and I am appealing for them to please contact us as this could assist our investigation.”
Anyone with information is asked to contact Dorset Police online or by calling 101, quoting occurrence number 55260105198. Alternatively, independent charity Crimestoppers can be contacted anonymously online using its website or by calling Freephone 0800 555 111.