The suspect stopped his vehicle for a few minutes on the 900 block of San Anselmo Avenue at about 4:55 p.m. next to the two girls, police said.
The man did not talk to the girls, instead he remained in his car with his pants down and his genitals exposed in a "sexual manner" until he drove away.
San Anselmo police officers immediately searched the surrounding area, but did not find the suspect or his dark blue two-door vehicle, which is described as having a pointed front end and being low to the ground.
Police are searching for the man, who is described as being in his mid 20s, with short black hair and three looped chin piercings.
Anyone with information is asked to contact the San Anselmo Police Department at (415) 258-4610.