Mr Trump reportedly used the term last week during a bipartisan Oval Office meeting on immigration reform.
He has now told journalists:
“I am not a racist. I’m the least racist person you have ever interviewed.”
It is the first time the President has responded directly to the racism accusations, the BBC reports.
He made the denial to White House press pool reporters at the Trump International Golf Club in West Palm Beach in Florida on Sunday night.
The row broke out after lawmakers from both parties visited the President on Thursday to work on a proposal for a bipartisan immigration deal.
In recent weeks the Trump administration has been withdrawing Temporary Protected Status (TPS) from a number of nationalities currently living in the country.
Reports later emerged in U.S media that Mr. Trump had asked during the meeting: “Why are we having all these people from shithole countries come here?”
Mr. Trump was said to have told them that instead of granting temporary residency to citizens of countries hit by natural disasters, war or epidemics, the U.S should be taking in migrants from countries like Norway.
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