Earlier this week, two co-workers said she threatened a machine gun rampage at the school.
Those workers alerted police, who arrested Milo at the school on Friday.
According to prosecutors, Milo was in a teacher's lounge at Fort Hamilton High School when she delivered the threat.
Milo's attorney insists she's innocent and that she doesn't own any weapons.
She faces up to seven years in jail if convicted.
Officials said Milo, 34, has had issues in the past. She was removed from the classroom last May and sent to the "rubber room" where New York City teachers accused of wrongdoing or incompetence were sent until a hearing could be held.
The Bloomberg administration and the teachers union agreed to do away with that policy this year.
Teachers are now reassigned to administrative duties or non-class work while they await their cases are pending.
Milo resumed teaching last September.
She has been with the school and the Department of Education since 2001.
Officials said she will face disciplinary action when legal proceedings are completed.