The Miaoling Medical Technology Group, based in Guizhou province, also said it had stopped production and sales of the cream, which was widely used to treat eczema in babies, the Beijing Youth Daily reported.
The hormone - clobetasol propionate - used to treat various skin disorders, should not be used by children under 12, according to drug information website drugs.com.
It can cause changes in blood sugar and can lead to Cushing's syndrome, a disorder characterised by a moon-shaped face, emotional disturbances, and in women, abnormal growth of facial and body hair.
The packaging of the cream, however, claimed it consisted only of 25 natural ingredients, according to an earlier report on Guangzhou news website gznet.com.
A report in Xiaoxiang Morning News in central China said that an eight-month-old girl in Changsha, the capital of Hunan province, had appeared to menstruate after being given the cream for seven months.
Doctors said they suspected the hormone was the cause, the paper said.
Another report published on the popular web portal sina.com said Guizhou's health department had fined the company 5,000 yuan (about $1,100) as far back as August 14 when it discovered the hormone in a test of the cream.
The report, citing a local paper in east China, said the product's license was in the process of being revoked.
The news comes as China is still reeling from a tainted milk scandal that has led to recalls and bans of Chinese-made dairy products around the world.
Milk made by 22 Chinese dairy companies was found to have been contaminated wth melamine, an industrial chemical normally used to make plastic, causing the death of at least four babies and sickening another 53,000.Calls made to the skin cream company and to the Guizhou health department went unanswered on Wednesday.