The Heathers actress recalled the incident in a weekend, June 21, 2020 interview with Britain's Sunday Times, claiming the "Braveheart" star referred to her as an "oven dodger."
"We were at a crowded party with one of my good friends, and Mel Gibson was smoking a cigar, and we're all talking and he said to my friend, who's gay, 'Oh wait, am I gonna get Aids?' " Ryder told the newspaper.
"And then something came up about Jews, and he said, 'You're not an oven dodger, are you?' "
According to Ryder, Gibson later tried to apologise to her, but she was upset by his comments as she had family members who died in the Nazi concentration camps during the Holocaust.
Now Gibson, who upset Jews when comments he made to a Jewish police officer during a drink driving arrest in 2006 went public, is firing back with a rep insisting Ryder's tale is completely fabricated.
"This is 100 per cent untrue," his spokesperson declares in a statement issued to the New York Post.
The representative claims Ryder previously made up the story for a 2010 GQ article, and nothing's changed since.
"She lied about it over a decade ago, when she talked to the press, and she's lying about it now. Also, she lied about him trying to apologize 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."
Ryder has yet to respond to the backlash.