Dear Worried Mommy,
 
It is understandable that you would be concerned about your son's behavior and the things he has been exposed to through his play with his peer. Here are a couple of things to keep in mind:
 
Sexual play or "playing doctor", is very common between the ages of 3-6. Children at this age have begun to discover the physical differences between boys and girls, and they are naturally fascinated with the different ways in which our bodies work (e.g., Boys pee standing up, girls pee sitting down). This interest inspires many children to engage in "show-and-tell", comparing and contrasting body parts, and playing doctor (the doctor's office is one of the few places they have dressed down in front of someone not in the family).

That said, the incident yesterday and his comments suggest to me that he may be trying to manage and make sense of sexuality concepts at the moment. Many children who are exposed to more "adult" forms of sexual content become preoccupied with sexually charged situations because they are trying to manage their anxiety about the exposure. The brain of a young child is not developed and mature enough to make sense of more adult sexual content and their little bodies can become charged. This can lead them to act these feelings out in a variety of ways.

Although your son's behavior is likely within the realm of normal sexual play, I recommend that you speak with your child's pediatrician or school counselor. A professional can help assess the the extent of your son's exposure and determine whether his experiences and behavior fall within the range of normal sexual development or whether he could benefit from professional support.
 
I have included a link to an article below that examines normative sexual development for young children.
 
Warm regards,
 
Laura Kauffman, Ph.D.
Licensed Child Psychologist