A conversation that started with joking about buying underwear quickly got awkward when Stewart realized his sexual quips about were reminiscent of the TV veteran's 2009 sex scandal. (Letterman admitted on air that he'd been intimate with female staffers after the boyfriend of one of the women tried to extort him.)
So what exactly did the political comedian say that had Letterman red in the face?
After discussing the GOP candidates, Letterman commented that Mitt Romney reminded him of the men who pose on packages of underwear.
"I buy underpants all the time, [but] I never realized there was a guy on the package," Stewart responded. "You know why? Because I'm always looking at the underpants."
When Letterman suggested the Daily Show host "had a guy who buys your underpants," the conversation switched gears.
"Do you even have to wear underpants anymore?" Stewart asked. "I would think at this stage in your career you would have people that could just sit there and hug your groin for you."
Letterman tried to interject, but Stewart continued, "I got people that get college credit for that. They could come in."
"Jon, I had a little trouble along those lines," Letterman said, at which point a giggling Stewart turned bright red and waved his arms in front of his face.
"Can I tell you something terrible?" Stewart asked. "I'm halfway through that bit—and all the sudden I realized, 'What am I doing?'"
He continued to apologize, which Letterman dismissed, even telling Stewart, "Don't explain it to me. I understand… You don't owe me an apology. Everything's fine."
Stewart likened his runaway joke to "when you vomit, you can't just [suck it back in]."
Letterman offered the Comedy Central host a pencil and quickly ended the segment.