After Letterman asked Handler what she thought about the late-night landscape, the funny gal said, "It's a hot mess. No one can keep their job for very long it seems. You're lucky to be here at CBS."
And then she went in for the kill.
When Letterman went on to say he would be lucky to have any job--even if it were mowing lawns--Handler quipped with a laugh, "well…you're a small man."
After admitting he was still stinging from Handler's "small man" comment later in her interview, Handler elaborated, saying, "You're not particularly large. You're very dainty for a man, and I mean that in the nicest way possible. I mean…you're fit."
"You're kind of hefty for a broad," Letterman joked back.
Letterman isn't the only late-night host E!'s own Chelsea Lately host has smacked down, though.
The comedienne recently got into a nude shower fight with Conan O' Brien as well, after O'Brien showed up to bicker about her studio set—which he said used to be his.