The 43-year-old appeared in Fremantle Magistrates Court on Tuesday charged with possessing and distributing child exploitation material between January 7 and 9.
No pleas were entered and Silvey was granted bail with conditions, and a $100,000 personal undertaking and a $100,000 surety.
Detectives executed a search warrant at Silvey's Fremantle home in Perth on Monday, when he was allegedly caught engaging with child exploitation offenders online.
"He was immediately arrested and his electronic devices were seized," a Western Australian police spokesman said.
Silvey is best known for his 2009 novel Jasper Jones, which was made into a film and various stage productions.
The book won the Australian Book Industry Awards Book of the Year Award.
His most recent novel Runt and the Diabolical Dognapping was published by Allen & Unwin in September.
Other books include Rhubarb and Honeybee, which won the Australian Indie Book Award in 2021.
Allen & Unwin said it was aware of serious charges and "deeply distressing" allegations against Silvey.
It said it would pause promotional activity of Silvey's work while the legal process took its course.
In WA, child exploitation material refers to any material, including images, videos, writings, or data, that depicts or describes a person who is under 16 in a sexual context or being subjected to abuse or cruelty.
Silvey is scheduled to appear in the same court on February 10.
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