The Onion is apologising for calling the nine-year-old star of Beasts of the Southern Wild a vulgar and offensive name on Twitter.
The satirical newspaper referred to Quvenzhane Wallis with an expletive intended to denigrate women.
"Everyone else seems afraid to say it, but that Quvenzhané Wallis is kind of a c***, right? #Oscars2013," it wrote.
Outraged Twitter users lambasted the paper overnight and it asked for forgiveness this morning.
Chief executive Steve Hannah wrote on Facebook: "It was crude and offensive - not to mention inconsistent with The Onion's commitment to parody and satire, however biting."
Hannah said the offensive tweet was taken down in an hour, and the newspaper has "instituted new and tighter Twitter procedures" to ensure it will not happen again.
He said those responsible would be disciplined.
Said Hannah: "Miss Wallis, you are young and talented and deserve better. All of us at The Onion are deeply sorry."
A message sent to Wallis' representative seeking comment wasn't immediately returned.
The Onion's original tweet brought some calls for the fake news organization to publicly identify the writer of the tweet.
The publication says it averages 40 million page views and roughly 7.5 million unique visitors per month.
Last year, the site made international headlines when the online version of China's Communist Party newspaper hailed an Onion report naming North Korean dictator Kim Jong Un as the "Sexiest Man Alive" - apparently unaware it was satire.