Mel Gibson has denied Winona Ryder's claim he once referred to her as an "oven dodger" during an uncomfortable conversation at a party in 1995.
Ryder also recalled Gibson asking her friend, who is gay, if he was "gonna get AIDS" while talking to him.
The 48-year-old actress recalled the moment with Gibson as part of a wide-ranging interview published in the Sunday Times .
She said: "We were at a crowded party with one of my good friends, and Mel Gibson was smoking a cigar, and we were all talking and he said to my friend, who's gay, 'Oh wait, am I gonna get AIDS?' And then something came up about Jews, and he said, 'You're not an oven dodger, are you?'"
Ryder said she was particularly upset by the actor's comments as she "had family who died in the camps".
But Gibson's representatives have denied the allegations, describing them as "100 per cent untrue".
"She lied about it over a decade ago, when she talked to the press, and she's lying about it now," they said in a statement.
"Also, she lied about him trying to apologise to her back then. He did reach out to her, many years ago, to confront her about her lies and she refused to address it with him."
The incident was first reported in an interview in GQ in 2010, the same year tapes of Gibson's profanity-laced, derogatory tirades were made public.
At the time, Ryder said she knew of Gibson's dark side long before many others did because of the party incident.
"He was really drunk," Ryder said of the "horrible" joke.
"It was just this weird, weird moment."
The Braveheart star, who grew up in Sydney, has suffered irreparable damage to his career over the years, with some of the industry's top players refusing to work with him.
In 2006, the actor was arrested for drink driving and was caught on tape making anti-Semitic remarks to the arresting officer.
In the years afterwards, controversy followed Gibson, including a headline-making interview during which he slammed a reporter who asked him about the 2006 incident, and a fiery recorded rant against his ex Oksana Grigorieva in 2010.
In the Sunday Times piece, Ryder talked about her other experiences with anti-Semitism in Hollywood.
Asked about her family's background, she told the newspaper: "Not religious, but I do identify. It's a hard thing for me to talk about because I had family who died in the camps, so I've always been fascinated with that time".
Winona also revealed she was once overlooked for a movie role because she looked "too Jewish".
She explained: "There are times when people have said, 'Wait, you're Jewish? But you're so pretty!'
"There was a movie that I was up for a long time ago, it was a period piece, and the studio head, who was Jewish, said I looked 'too Jewish' to be in a blue-blooded family."