Daphne Viola Webb was reported missing Wednesday morning by her father, 49-year-old John Anthony Webb.
Webb told police his daughter was abducted by a stranger at about 11 a.m. while she sat in a parked car with his 87-year-old mother while he went inside to buy something at the Gazza Supermarket at 7838 International Blvd.
Authorities have been searching for the little girl and arrested Webb Thursday on suspicion of felony child endangerment.
Webb was held at Santa Rita Jail on $100,000 bail, but district attorney's office spokeswoman Teresa Drenick said Friday that no charges are being filed against him pending further investigation.
Police have said they were concerned that Webb had left Daphne with her grandmother, who suffers from dementia.
Police said they are looking into Webb's relationship with his daughter and other possible child endangerment incidents.
Meanwhile, police are trying to understand where Daphne was last seen and where she is now.
Police are treating Daphne's disappearance as both a missing person and kidnapping case and a child endangerment case and are conducting parallel investigations.
Foul play has not been ruled out in the case, police said.
Police are still seeking and treating as a suspect a woman who was described as being black or Hispanic and in her 30s with long black hair. She was wearing a light-colored top and blue jeans and was seen walking away from the area of the supermarket with a girl who looked like Daphne.
However, no one has reported seeing Daphne get abducted, police said.
Police are still trying to confirm the last time that Daphne was seen and establish a timeline for when she was last seen with her father.
Daphne lives with her father and her grandmother at a residence in the 8000 block of Greenridge Drive, off of Keller Avenue, in the Oak Knoll area of northeast Oakland, according to police.
There are many trails and parkways in that area that police are searching.
Daphne's mother lives at a separate location, but investigators have been in contact with her and she has been cooperative and isn't considered to be a suspect, police said.
Investigators in a boat used an underwater robot to search the water in the Martin Luther King Jr. Regional Shoreline on Thursday. The park is an area where Daphne was known to be frequently taken by Webb.
Webb is released from jail
When he came out of jail, Webb answered most of ABC7 News' questions, but there were a few he could not answer and that's why police aren't convinced his daughter was abducted.
"My daughter's missing, and I have to live with that. Even though I'm out of jail, I'm still not free," said Webb. "Who saw me? I don't know who saw me to tell you the truth. But like I said, I'm a homebody, Daphne's at home, my mom's at home, and I talk to my wife everyday where she's at and she hears her in the background playing."
Webb says his wife, Kiana Webb, has been in a drug rehab program for almost three months, and she hasn't actually seen the child in two weeks.
When asked if he ever saw his wife endanger the baby, he replied, "I don't want to say that. I'm already sad and I know her mother loves her. She gave birth to her."
Webb says his wife was living on the streets with the baby which prompted a child protective services investigation. He admits there was a restraining order on his wife, and Daphne is missing part of her ear which was also part of the CPS investigation.
When asked if he could tell us how she lost that part of her ear, Webb said, "No I am not doing that on national TV. No, I am not doing that. I just want my baby home."
Now Webb says he's going to go home, and prepare to go out and find his daughter.
Daphne is described as black, with short, curly black hair and brown eyes. She was last seen wearing orange two-piece pajamas with pink hearts and pink socks.
Anyone with information on the girl's whereabouts is asked to call the Oakland Police Department Missing Persons Unit: (510) 238-3352 or 911.
ABC7 News reporter Alan Wang contributed to this report.