The man scooped up the bear not realizing what was inside and brought it to his Shelby, N.C., home. His cousin realized something was amiss when a device that smelled of gasoline with a wire attached to it fell out of the stuffed animal.
The family called 911 and police came to retrieve the item.
It has since been dismantled and sent to the federal Bureau of Alcohol, Tobacco, Firearms and Explosives for closer examination.
Jessica Burge, the mother of a preschool-aged son, who lives in the area told WSOC-TV, Charlotte, she's at a loss as to why someone would put a bomb in a children's toy.
"I'm just trying to figure out why would you put a bomb in a teddy bear in the first place. If anybody would have picked it up it would have been a child," Burge said.