Benedict Cumberbatch says he's "devastated to have caused offence" after referring to black actors as "coloured" on a US talk show.
He was talking about diversity in UK acting when he made the comment.
Anti-racism charity Show Racism the Red Card says the term is "outdated".
The Oscar-nominated actor was telling American television presenter Tavis Smiley that he believes Hollywood offers more opportunities for black actors than the UK does.
He said: "I think as far as coloured actors go it gets really difficult in the UK, and a lot of my friends have had more opportunities here (in the US) than in the UK and that's something that needs to change."
His comments were quickly criticised online and charity Show Racism the Red Card said that he had "highlighted the issue of appropriate terminology".
They said: "The term 'coloured' is now outdated and has the potential to cause offence due to the connotations associated with the term and its historical usage."
In a statement the 38-year-old said: "I can only hope this incident will highlight the need for correct usage of terminology that is accurate and inoffensive.
"The most shaming aspect of this for me is that I was talking about racial inequality in the performing arts in the UK and the need for rapid improvements in our industry when I used the term.
"I feel the complete fool I am and while I am sorry to have offended people and to learn from my mistakes in such a public manner, please be assured I have.
"I apologise again to anyone who I offended for this thoughtless use of inappropriate language about an issue which affects friends of mine and which I care about deeply."
Will it affect his career?
Newsbeat's entertainment reporter Natalie Jamieson looks at if this could affect Benedict Cumberbatch's career.
"Benedict Cumberbatch has apologised profusely and while no time would've been good for this type of controversy, the timing is particularly bad.
"As you're probably aware, Benedict is a nominee for actor in a leading role at the Oscars and the voting for that is still taking place.
"It's fair to say his fellow nominees Eddie Redmayne, Michael Keaton, Bradley Cooper and Steve Carell probably just got an indirect voting boost.
"Benedict's also nominated for best actor at this year's Baftas.
"If you watch the full interview between Benedict and Tavis Smiley, his words leading up to this comment were all about praise for fellow Brits David Oyelowo and Chiwetel Ejiofor.
"Benedict's career will be fine after this, but any unease he felt before about walking those red carpets at the Oscars and Baftas just intensified."