The 74-year-old appeared in Broome Magistrates Court on Thursday.
He is charged with 19 offences, including two counts of sexual penetration without consent between 2010 and 2012.
He is also accused of three counts of a person in authority indecently dealing with a child between 2008 and 2010.
Archbishop Timothy Costelloe (right) said allegations against Saunders were "deeply distressing". (Joel Carrett/AAP PHOTOS)
The former cleric has also been charged with 14 counts of unlawful and indecent assault between 2010 and 2014.
The offences are alleged to have occurred in towns and communities in the Kimberley region.
Western Australian police arrested Saunders at his Broome home on Wednesday.
Child abuse squad detectives had travelled to the popular holiday town and searched the former bishop's home on two occasions in recent months.
The Catholic Church previously investigated allegations of sexual assault and grooming against Saunders but did not initially share its findings with WA police.
WA Premier Roger Cook in September said it was a "blight" on the church that the incidents had not been reported earlier, after news broke of the 200-page Vatican Vos Estis Lux Mundi investigation.
On Thursday, Mr Cook said it was disappointing when institutions "have not been as accountable as the community would expect".
"I'm pleased now that charges have been placed, but it is before the court and so I won't comment any further," he said.
Archbishop of Perth Timothy Costelloe, president of the Australian Catholic Bishops Conference, said the allegations against Saunders were "deeply distressing, especially for those making those allegations".
"It is right and proper, and indeed necessary, that all such allegations be thoroughly investigated," he said.
"The Church will continue to co-operate fully with the police and take every necessary step to avoid any actions which may compromise the integrity and autonomy of the police investigation."
WA Police Commissioner Col Blanch said Saunders had been charged with very serious historical sexual offences.
He thanked the alleged victims for co-operating with the investigation, saying they were "very brave and courageous".
"I (also) want to thank the investigators, who have done a wonderful job and the community of Broome who have also stood up and helped," he said.
Saunders resigned from his role in Broome in 2020 after sexual misconduct and bullying claims emerged. He denies the allegations.
WA Police has previously said it carried out two investigations into a number of complaints regarding a member of the Catholic Church in the Kimberley between 2018 and 2020.
It said there was insufficient evidence to lay criminal charges.
Saunders was granted bail and is scheduled to reappear in the same court on June 17.
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