Over the weekend, Farrow wrote an open letter published by the New York Times detailing a 1992 incident in which she says Allen molested her.
Walters came to the director's defense, noting that she and Allen are friends.
That sparked a heated exchange between Walters and co-host Sherri Shepherd.
Allen's attorneys maintain that his ex-wife Mia Farrow encouraged Dylan to make up the abuse allegations during a custody battle.
