The Reverend Peter Lister, 63, director of education for the Diocese of Lichfield, appeared before South East Northumberland Magistrates on Tuesday.
He pleaded not guilty to indecently assaulting the boy between 1979 and 1983 in Morpeth, Northumberland.
Magistrates granted unconditional bail to Mr Lister, of Yoxall, near Burton-on-Trent, Staffordshire.
His wife, the Reverend Jenny Lister, sat in the public gallery during the brief hearing.
Mr Lister will appear before the same court for a committal hearing on 12 July.
Outside the court in Bedlington, a Church of England spokesman released a statement, which said Mr Lister had been suspended from his role as education director while the legal process was carried out.
The statement added: "A suspension in these circumstances is to be seen as a neutral act and it is important to stress this does not imply the result of the case has been pre-judged."