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Left-winger Andy Kerr appeared to mock a female delegate for crossing herself after he invited her to take part in a debate.
Mr Kerr, the chairman of Labour’s ruling National Executive Committee, said: “Did you cross yourself, there? In that case, I might not.”
His jibe sparked a furious backlash, with Scottish Labour leader Richard Leonard branding it “unacceptable”.
Asked if the comment was “bigoted”, Mr Leonard added: “That might be one way of describing it.
“There is absolutely no room inside the Labour Party for that kind of remark, whether it’s meant as a form of humour or not.
“It’s completely unacceptable and Andy Kerr has unreservedly apologised for the remark that he made.”
Scottish First Minister and SNP leader Nicola Sturgeon said: “Andy Kerr’s comment was appalling.
“The Catholic community is an integral and valued part of Scottish life.
“Everyone who stands for a Scotland where bigotry and sectarianism have no place, and where we positively embrace diversity, must unite to condemn – regardless of their party.”
Scottish Conservative leader Ruth Davidson added: “People from all parties and none will be appalled by this and by the casual dismissal of concerns.”
The religious row comes as Labour continues to battle with long-standing claims of anti-Semitism within the party.
A spokesman for the Catholics for Labour group said: “At a time when religious tensions are high in the party a comment like this was foolish at best, divide and worst.
“While we welcome and accept Andy’s apology, we need to show Labour Catholics, and people of all faith, that they belong in this party.
“We can never normalise ridiculing anyone on the basis of their religion. We are a party of the many, not the few.”
Speaking anonymously, one Labour Party MP said the comment risked alienating Catholic voters in Scotland.
They told PoliticsHome: “To have any chance of winning again in Scotland we need to persuade tens of thousands of Catholic voters we’ve lost to the SNP to come back to Labour.
“The sight of the NEC chair mocking someone for blessing themselves live on television at our party conference doesn’t exactly aid that task.”
Another MP said: “I couldn’t believe what I was hearing – a casual, gratuitous anti-Catholic insult from the chair of Labour Party conference.”
In a statement, Mr Kerr said: “I apologise unreservedly. I was trying to be lighthearted but what I said was ill-judged and wrong.”
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