He and the kids -- with a nanny along for an extra helping hand -- took in a neighborhood fair and seemed to have a blast.
Denise and her widowed dad are extremely close and he's often seen with her and her kids.
Sheen and second wife Denise have two daughters, Sam and Lola. She has since adopted another daughter.
Sheen also famously has twin boys, Bob and Max, with third wife Brooke Mueller, who is now in rehab.
As RadarOnline.com has been reporting, because of her continuing drug use, Mueller has been stripped of custody of her kids.
With Sheen's approval, they've been placed with Denise who has been given temporary guardianship at the very least until Mueller completes her treatment at the Betty Ford Center.