Douglas Randal Bogart, 60, and Gaylene Jo Bogart, 60, of Cary were both charged with two counts of misdemeanor child abuse and two counts of cruelty to animals.
A police spokesperson described the conditions inside the home as "abject squalor."
Police were called to the home Sunday after someone reported children living in an unsafe environment.
Douglas Bogart was identified as the step-grandfather and Gaylene Bogart was listed as the grandmother of the children.
"It's an eye test. They'll look at the conditions of the home, the conditions of the children, the clothing, the cleanliness," Cary Police Captain John Szymeczek told ABC11. "And in this particular case it was just obvious that this was not a safe environment for either the children or the animals present."
Arrest warrants describe the conditions in which the 14-year-old boy and 11-year-old girl were living.
An officer writes that the health hazards in the home included "...black mold, feces, urine, and fleas."
According to the documents, the couple also had large mixed breed dog that "could hardly walk" with nails over 3 inches long as well as mange.
There was another small white dog with nails "curling around the paw," according to warrants.
Police said the kids spent Sunday night at a hotel with a family member and are also in the care of Wake County Child Protective Services.
The grandparents are listed the owners of the home on Helmsdale Drive, but they have apparently not used the property as bond collateral and the two remain behind bars.