Unlike the book it's adapted from that takes place in Arthur's 2nd grade with Mr. Marco as a flashback event, it is set during his 3rd grade school year with Mr. Ratburn. Arthur's friends during this timeline are shown with a lost tooth (until later when he finally loses a tooth), but none of them have any missing teeth in other episodes as it takes time for permanent teeth to grow in places each kids' baby teeth have fallen out from.
In this television adaptation of "Arthur's Tooth", Arthur and his friends lose their first baby tooth from the bottom end of their gums. The cover illustration by Marc Brown for the VHS and DVD releases of this episode as well as extra ones included depict Arthur having lost his first baby tooth from the top end of his gums.