When a horrified mother saw her 3-year-old fondle the family dog -- mimicking a game he played with his 12-year-old male babysitter -- she turned to Chicago psychiatrist and pediatrician Domeena C. Renshaw. An authority on sexual abuse and dysfunction, Dr. Renshaw told her to teach her son to say "no" to anyone who tried to see or touch his genitals.

Such incidents are common among the 300 patients Renshaw sees yearly in the children's clinic she runs for Loyola University. Much of this abuse could be prevented, Renshaw contends, by early sex education at home.

"We teach our children the rules of the road so they don't get run over by a truck," she asserts, "yet we don't teach them the rules of body privacy so they don't get run over by a molester."

To help parents teach children to fend off sexual abuse without tarnishing their delight in their own budding sexuality, Renshaw has written a 34-page, read-aloud coloring booklet, "Sex Talk for a Safe Child," published recently by the American Medical Association (AMA). An explicit yet sensitive guide to normal and abnormal affection and sex, it is designed to help parents, teachers and counselors know what to say and how to say it.

Parents should start talking to their child about sex and abuse when the child asks or when the situation demands, she says, just as "when a youngster is ready to cross the street, you tell him to look both ways.

They must also be told, if a parent is not immediately available, to use the same backup emergency help for a sex problem as for an accident or a fire . . . Tell a neighbor or teacher, call mother or father at work, phone the police or a grandparent. Paste those numbers in a child's lunch box or satchel."

While parents -- even doctors -- may feel shy about discussing sex, Renshaw contends that ignorance can be harmful for today's child, who is bombarded with sex and violence on television and left more vulnerable to abuse in day care centers or from step parents.

"All children deserve to learn about sex at their beginning level of understanding," she says. "They must be told their own rights to body privacy -- that it is breaking the law to touch another's sex parts by deceit or force."

Parents should tell children, she says, that:

* It's normal to be curious about and to touch your whole body.

* Our custom is to wear clothes and keep the body private.

* Check out all grown-ups and "big kids" you don't know with your parents or teachers.

* Don't be alone in alleys or other dangerous places.

* Always go tell your mother or father or teacher when you are not sure about why any bigger person inside or outside the family tries to touch and play with your sexual parts.

* For lots of people -- even parents, doctors and teachers -- talking about sex is difficult and they feel shy. This is normal.

For information about child sexual abuse, call the FACT (Families and Children in Trouble) hotline, 628-3228. The hotline also will refer callers to local service agencies.

To set up an evaluation for a child who you suspect has been molested, phone the Division of Child Protection at the Children's Hospital National Medical Center, 745-4100. For general information call 745-5682 or write the division at 111 Michigan Ave. NW, Washington, D.C. 20010.

To report a case of child sexual abuse, phone the Sex Offense Branch of the D.C. police, 727-4151.

"Sex Talk for a Safe Child" is available for $5 from Order Department OP-234, American Medical Association, P.O. Box 10946, Chicago, Ill. 60610.