In a mobile phone video taken by a local resident, the 62-year-old woman can be seen unlocking two children, aged seven and eight, out of cages in the boot of her vehicle.
It is alleged that Leimome Cheeks, 62, put the children in the cages because there wasn't enough room in her SUV.
On the day the video was recorded, temperatures in Memphis reached 95 degrees.
Cowan recently bought two German Shepard puppies, neighbors told WREG.
Cheeks admitted to traveling with the kids from Whitehaven to Collierville, which is a 35-minute drive.
Skylark Blake, one of Cheeks' neighbors said the incident was not typical of something Cheeks would do.
The website NoHeatStroke.org says 754 children have died after being left in hot cars since 1998.
Camillia Cowan, who said she was Cheeks' neighbor, according to WHBQ, was deeply troubled when she saw the video online. She said they were later allowed to ride in the backseat.
Police say the children were not harmed.
Cheeks was charged with two counts of child endangerment on Monday.
"I don't think she knew because she loves her grandkids", Cowan told Fox 13.
State child welfare officials are "now involved and investigating", a spokesman told the Appeal. Officials released her from jail on bond on Sunday, according to WHQB-TV in Memphis.