Assistant Chief Constable Malcolm Graham said the six-week long Operation Lattise showed that online abuse was a “national threat”, with victims ranging from just three years old to 18.
So far, 77 people have arrested as a result of the work - including six registered sex offenders and four people who were regarded as being in a “position of trust”.
Of the 523 “victims or potential victims”, 122 have been referred to child protection services.
More than 390 charges have been brought so far, Police Scotland said, including rape, grooming, sexual extortion and indecent communication with children, as well as drugs offences, possession of a firearm and bestiality.
The operation, which took place between June 6 and July 15, focused on the distribution, possession and sharing of indecent images of children, online grooming, the livestreaming of sexual abuse and the sexual extortion of youngsters over the internet and using webcams.
Mr Graham said: “The key message coming out of this is to raise awareness about the extent of online abuse and to make sure both children and young people, and parents and carers, know how to keep themselves or vulnerable children safe.”
He added: “Child sexual abuse, including exploitation, takes place solely because of decisions made on the parts of abusers and we know that child sexual abuse is a national threat.
“The reality is that it is happening now not only across Scotland but increasingly across the world to children of all ages from infants to teenagers.
“The impact of online child sexual abuse can be wide-ranging but have long-lasting, life-changing effects and when we’re talking about the sharing of images we’re not just talking about indecent images of nude or naked children, we might be talking about the sexual assault of children, about the rape and sexual torture of a child.
“We’re talking about the grooming of a child for sexual purposes, people who have an intention to meet children and to commit serious sexual offences against them - horrifically, the livestreaming of children being sexually abused from across the world, sexual extortion of children and communicating indecently with a child for sexual purposes.
“There’s an evolving and deeply concerning threat posed by predatory sex offenders, given that these offences can be perpetrated online at the touch of a button.”
He said in “some respects” he had been surprised at the level of abuse that was discovered but added: “Sadly, in other respects I am not because we have got a growing sense of the scale of this problem, we’ve had a better understanding over the course of the last three years with what Police Scotland has been able to bring in terms of dedicated resource supporting activity in local communities.”
Mr Graham continued: “I’ve got a simple message for perpetrators - you engage in this type of activity, you will be caught.
“The internet doesn’t offer anonymity to people, we know people who would seek to commit this type of crime will increasingly try to find ways of not being caught, devious ways and using technology in a sophisticated fashion.
“You will be caught, the internet doesn’t offer anonymity and every contact through some sort of online interaction does leave a trace, which can ultimately be directed back to an individual.”
Police officers assessed more than 100,000 online chat logs as part of the crackdown, focusing on a number of sites and social media platforms used mainly by youngsters.
While officers found more than 500 victims in Scotland, Mr Graham warned improving technology in developing nations meant children there were increasingly at risk.
He said: “A lot of the demand for abusing children may come from people we are targeting in Scotland, the victims are likely to be in parts of the developing world where digital communications are just catching up with where we have been for a number of years.”
The senior police officer also stressed internet service providers have a responsibility, saying they should “tackle this issue and do so pro-actively without necessarily just being led by the police”.
Early years minister Mark McDonald said the Scottish Government would consider the results of Operation Lattise as part of its ongoing child protection work.
He said: “The internet and mobile technology has opened up a huge range of opportunities for children and young people, there’s a great deal of information out there that previously would have been very difficult to access, opportunities to make connections of a positive nature with other young people across the world which previously would have been very difficult to do.
“But alongside those opportunities there are significant risks and what this operation has highlighted is just how significant and just how prevalent those risks are to young people within Scotland.
“We have to ensure children and young people are able to use the internet in a safe manner and able to be protected from some of the abuse that takes place online.”
NSPCC Scotland policy and public affairs manager Joanna Barrett said:”It is a strategic priority for the NSPCC to keep children safe online, so we really welcome Operation Lattise as a demonstration of how seriously Police Scotland takes this issue.
“It’s absolutely right that perpetrators are brought to justice but we would also reinforce the need to look at prevention as well, and a huge part of prevention is the education that we give to our children in terms of healthy relationships.
“We need to give children and young people across the curriculum the skills and the tools and the resilience to deal with the online world, to manage risk and to make safe choices.”