Nazila Sharaf, 35, of Dublin, and Lida Sharaf, 33, of Mountain House, who entered their pleas on Monday, are scheduled to return to Alameda County Superior Court in Dublin on June 5 for a pretrial hearing.
The sisters were arrested last Wednesday but were released from custody Thursday after posting $340,000 bail. They were initially held on $700,000 bail but a judge later reduced that amount.
Both women face three counts of felony child neglect and abuse and four counts of misdemeanor child neglect and abuse, according to the Alameda County District Attorney's Office.
Livermore police began investigating the case after they were asked to help the California Department of Social Services shut down the Universal Preschool LCC at 1040 Florence Road in Livermore. The investigation wrapped up a month later, on April 15.
Livermore police spokesman Steve Goard said the investigation revealed that the Sharaf sisters had allegedly bound at least seven of the babies' upper torsos and legs with blankets and other cloth-type materials during naps.
Those actions allegedly restricted the babies' ability to breathe comfortably and move their extremities, Goard said.
Police said the sisters also threw blankets over the bound babies' faces.
The babies ranged in age from 7 months to 11 months, and three had respiratory conditions, according to police.
Authorities were alerted about the alleged activity by a 19-year-old former employee who quit the facility in late 2011, according to Goard.
The former employee, whose name has been sealed to protect her privacy, filed complaints with the state, which conducted its own investigation. According to Goard, the swaddling of an infant over 6 months old should be done only at the request of a parent.
According to a report by the Alameda County District Attorney's Office, being restrained caused the babies to suffer both mentally and physically.