Icahn, who owns 2 percent of eBay, has been pushing the company to spin off its financial transaction business PayPal, the Wall Street Journal reported Monday.
Recently, he accused two company directors of operating despite conflicts of interest and the chief executive officer of turning a blind eye to the problem.
"In any sane business environment these directors would simply resign immediately from the eBay board, either out of pure decency or sheer embarrassment at the public exposure of the extent of their self-serving activities," Icahn said.
CEO John Donahoe "seems to be completely asleep or, even worse, either naive or willfully blind to these grave lapses of accountability," Icahn said.
The company retorted with a statement.
"As we are sure our other shareholders would agree, we prefer to engage in more constructive and substantive discussions of why, in our view, PayPal and eBay are better together. Instead, Mr. Icahn unfortunately has resorted to mudslinging attacks against two impeccably qualified directors," the company said.
Icahn "cherry-picked old news clips and anecdotes out of context to attack the integrity" of the company's directors, eBay said.
Icahn said one director, Marc Andreessen, invested in two former eBay spin offs and was part of an investor group that moved in on digital communications service Skype, paying less than eBay did when it purchased Skype, which was later sold to Microsoft Corp.
Another director, Scott Cook, is the founder and currently a director at Intuit Inc., Icahn said.
Intuit Inc. directly competes with PayPal, Icahn said.