Maria Waltherr-Willard had been teaching French and Spanish at Mariemont High School in Cincinnati, Ohio since 1976.
Sky News reports that when the 61-year-old was transferred to the district's middle school in 2009, the seventh and eighth-graders she was required to teach triggered her paedophobia (phobia of young children).
This in turn caused her blood pressure to soar and led to her retirement in the middle of the 2010 school year.
The lawsuit states that Waltherr-Willard's paedophobia is covered by the federal Americans with Disabilities Act, and that the district violated it by transferring her and refusing her a move back to the high school.
School district attorney Gary Winters claimed that Waltherr-Willard simply "wants money," and added: "Let's keep in mind that our goal here is to provide the best teachers for students and the best academic experience for students, which certainly wasn't accomplished by her walking out on them in the middle of the year."
The suit is seeking unspecified damages, but Waltherr-Willard claims she has lost out on at least $100,000 (£62,239) of potential income as a result of early retirement.