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It is understoood the Western Australia-raised Bootsma shared images of himself with a teenage girl, who then made contact with Carlton via her mother on Monday night.
The images were posted on SnapChat - the same social media application that last month landed New Zealand Warriors NRL player Konrad Hurrell in strife.
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On the emerging platform, users can take photos or record videos and send them to a controlled list of recipients and choose to have them disappear within 10 seconds.
The Blues say the utility had been warned over a series of disciplinary breaches since he joined the club in 2011.
"The Carlton Football Club has high expectations of its players and staff; we expect them to uphold certain standards," Carlton's football operations manager Andrew McKay said.
"The club has attempted to offer Josh numerous forms of welfare and support in recent times, however he has continuously not lived up to the standards expected of a senior listed AFL player.
"This latest issue has left the club with no other choice but to take this course of action.
"Carlton players and staff receive education on both social media policy and AFL Code of Conduct on a regular basis."
Bootsma has played 14 senior games with the Blues. Photo: Getty
Bootsma, 21, was taken with pick No.22 in the 2011 draft.
Bootsma is the third player Carlton lost from its playing list in 2014, following the retirements of Nick Duigan and Heath Scotland.
In an unrealted incident, Hurrell was fined by the NRL integrity unit over a video posted of him involved in a sex act with New Zealand television actress Teuila Blakely.